September 24, 2019 / 7:59 PM / 21 days ago

Argentina's Macri meets IMF backers in New York, funding questions linger

NEW YORK (Reuters) - Argentine President Mauricio Macri met with his International Monetary Fund backers in New York on Tuesday, but there was little light shed on whether the body was likely to approve a key $5 billion tranche of funds to the indebted country.

FILE PHOTO: Newly appointed Argentina's Economy Minister Hernan Lacunza attends a news conference at the Casa Rosada Presidential Palace in Buenos Aires, Argentina August 20, 2019. REUTERS/Agustin Marcarian -/File Photo

Macri met with IMF Acting Managing Director David Lipton at Argentina’s Mission to the United Nations, his first face-to-face with the organization in the United States after a sharp market crash in August pushed Latin America’s No. 3 economy toward default.

Also present were Argentine Treasury Minister Hernan Lacunza and central bank head Guido Sandleris, who are in the United States for crunch talks with the IMF about the status of a $57 billion credit facility agreed last year.

Macri, who struck the IMF deal, was badly defeated in a presidential primary in August, a surprise result which sparked the market sell-off. He is widely expected to lose to Peronist challenger Alberto Fernandez in the Oct. 27 general election.

Lacunza told reporters outside the talks that the decision over the next tranche of funds was in the IMF’s hands, but that “it was clear” Argentina had complied with its fiscal and monetary commitments under its IMF financing deal.

He added that an Argentine technical mission would meet with the IMF in Washington the week of Oct. 14.

The green light for the latest portion of funds was expected this month, but has been delayed amid concerns over Argentina’s economic woes, with many expecting the IMF to wait until the political outlook becomes clearer.

The IMF’s Lipton said in a separate statement that the meeting was “constructive” and the Fund would continue working with Argentina to respond to the country’s “difficult situation and the challenging times ahead.”

The August market crash led Argentina to burn through $16 billion in foreign reserves to help stabilize its currency, with Macri also imposing capital controls. The country announced plans to renegotiate foreign and local debts.

IMF support is key for Argentina, whose jittery markets have been temporarily stabilized ahead of the October election. Strains, however, are starting to appear beneath the surface.

Withholding the funds could spark renewed concerns about Argentina’s ability to pay off its debt.

Lacunza and Sandleris will be in Washington on Wednesday as part of talks with the IMF that began in Buenos Aires in August, and which Lacunza’s office has called “continuous and fluid.”

Additional reporting by Luc Cohen at the United Nations and Cassandra Garrison and Adam Jourdan in Buenos Aires; editing by Grant McCool and Jonathan Oatis

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