Argentine IFI Loan Proposal Positive, Say Analysts

Argentina’s plan to borrow $10bn from the IDB and World Bank in the coming months for 2008-2011 is being viewed as a positive move by Wall Street analysts, who believe the country would be subjected to a more disciplined approach to the markets and its debt management policy. “Argentina appears to be taking stock of the change in global conditions and financing risks; and the country is looking for new sources of funding that would require maintaining a more conservative policy framework,” says Merrill Lynch. Citi notes total amortizations with the IFIs are expected to be $6.4bn in that period, which permits the institutions to become net suppliers of funds to Argentina if they are needed. The move marks a significant change of tune by the Kirchner administration vis-à-vis multilaterals. Last year, Argentina paid down its IMF loans in a dismissive tone, saying the institution’s opinions were no longer welcome or relevant. The new funds would be used for investments in public works, social programs, health, science and technology.