Category: Argentina

The Inter American Development Bank extended $167 million in loans to finance tourism promotion and production development in Argentina. The bank will allocate $70 million to support a $117 million program aimed at increasing the competitiveness of companies in Mendoza province in western Argentina. The IADB will also loan $33 million to finance tourism projects in the provinces of Chubut and Misiones.

President Néstor Kirchner of Argentina fired Central Bank board member Ricardo Branda following charges that he took bribes when he served as a Senator in 2000. Branda denied the allegations, which some analysts say are politically motivated. His dismissal feeds concern over the independence of the central bank.

Argentine officials are trying to derail a $1.6 billion pulp mill project in neighboring Uruguay, near the Argentine town of Gualeguayche, that they say would kill fresh-water dorado and catfish and hurt tourism along the nations’ common border. The plants are financed by Finland´s Metsae-Botnia Oy, which is building a $1.1 billion mill, and Spain´s Grupo Empresarial Ence, which plans to invest another $500 million in a second factory. Argentine Foreign Minister Rafael Bielsa last month said runoff from the plants will kill fish and birds in a UN protected wildlife area.

Argentina’s annual inflation rate rose to 9.6 percent in the 12 months through July as increased government spending sparks a surge in consumer demand. The pickup in inflation has prompted the government to halt the sale of inflation-linked bonds, whose interest rates have surged along with consumer prices, and turn to the sale of dollar- denominated securities in a bid to keep down borrowing costs. The central bank said in a July 20 report that inflation would exceed the 5 percent to 8 percent range it had forecast in January for 2005.

The International Monetary Fund and Argentina are discussing the “next steps” in efforts to reach a new loan accord, said an IMF spokesperson. Argentina, which owes the Fund about $11.7 billion, asked in June to resume talks for a new loan accord. The IMF last year suspended a $13.3 billion loan agreement signed in September 2003 as it waited for Argentina to complete the restructuring of about $104 billion of debt it defaulted on in late 2001.

Argentina plans to issue $500 million in dollar-denominated bonds maturing in 2012 today as part of its 2005 debt program. If demand is high the issue might be increased by another $50 million. On July 18 Argentina sold $442 million in US dollar-denominated bonds maturing in 2012, the country´s first bond issue in US dollars after its debt restructuring of some $100 billion completed last May.

Argentine President Nestor Kirchner pledged to pay back $14 billion owed to the International Monetary Fund to free the country from policies mandated by the lender. Argentina’s government in May asked the IMF permission to defer payments on loans for a third time since 2001 to help the country free up funds needed to pay bondholders that accepted the restructuring of more than $100 billion of defaulted debt. The Fund is pressuring the Kirchner administration to increase its primary surplus and negotiate with holdout investors who refused to take part in this year´s debt swap.

to join discussions at LatinFinance’s Cumbre Financiera Argentina in Buenos Aires, 27 – 28 July 2005. Apply for your invitation today at www.latinfinance.com/argentina

Pilots and technicians at Aerolineas Argentinas went on strike Tuesday, paralyzing flights at Ezeiza international airport in Buenos Aires. Union leaders, which said the strike would last 12 hours, are demanding a salary increase of 40 percent. Aerolineas Argentinas, Argentina´s largest airline, is owed by Spanish travel group Marsans.

Argentina has said it will halt sales of index–linked government bonds on local markets as inflation picks up. Annual inflation doubled to 9% in June. Officials say they are worried the bonds could fuel inflation expectations. In future, the government will issue fixed-rate dollar-denominated bonds. Last week, the government sold $442 million in bonds in the local capital markets in its first sale of dollar bonds since its 2001 default.