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New Argentine IMF deal 'solely' to repay $44 billion already owed to fund - country representative

FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas

BUENOS AIRES (Reuters) - Argentina is seeking a new deal with the International Monetary Fund solely to pay back around $44 billion that it had received under an ill-fated stand-by lending agreement in 2018, the country’s representative at the fund said on Thursday.

Sergio Chodos, IMF executive director for the Southern Cone and Argentina’s representative at the fund, told Reuters the government would not seek new financing.

“Argentina’s intention is to seek IMF financing for the sole purpose of full repayment of the $44 billion that is still owed to the fund,” he said in a telephone interview.

Argentina, set to wrap up a $65 billion debt deal with bondholders this week, is also opening talks for a new IMF deal.

Of the $57 billion promised when the 2018 deal was signed by the previous administration, as part of an unsuccessful attempt to halt a run on the local peso and avoid what would be the country’s ninth sovereign bond default, $44 billion had been disbursed before the current government canceled the pact.

Argentina is not expected to seek debt relief, or a “haircut” from the fund, while private creditors have agreed to receive less than originally promised when they bought bonds the government says it cannot honor without worsening what is already expected to be a 12.5% economic contraction this year.

“The crisis that affects our country today was deepened by a quick agreement with the IMF in 2018, that was unsustainable,” Argentine Economy Minister Martin Guzman and central bank chief Miguel Angel Pesce wrote in a letter to IMF head Kristalina Georgieva on Wednesday.

Reporting by Hugh Bronstein; editing by Jonathan Oatis

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