BUENOS AIRES, Argentina — Argentina opened discussions with the International Monetary Fund on Tuesday about obtaining a “line of financial support”, President Mauricio Macri announced amid a bout of market turbulence in Latin America's third-largest economy. The peso has lost a quarter of its value in the past year amid President Macri's pro-market reforms. “During the first two years we have had a very favourable global context, but today that is changing, global conditions are becoming increasingly complex due to several factors: interest rates are rising, oil is rising, currencies of emerging countries have been devalued, all variables that we do not control.”

Last week Argentina’s central bank raised interest rates from 33.25% to 40% in a bid to halt the slide in the peso. "Faced with this situation, and preventively, I've started conversations with the International Monetary Fund ... A few minutes ago I spoke with Christine Lagarde, and she confirmed we would start working on an agreement today." Discussions have been initiated on how we can work together to strengthen the Argentine economy and these will be pursued in short order.”

However the political side of the situation will face a decisive challenge this Wednesday in Congress where lawmakers agreed to discuss a capital markets bill, sponsored by the government, and at midday an opposition initiative to freeze utility rates to their November level, with any future increases in line with salary levels. In March, consumer prices in Argentina rose 2.3 percent, bringing the 12-month inflation rate to 25.4 percent, well above the central bank's 15 percent target. The move was remarkable, given that many people still blame the IMF's austerity requirements for policies that led to a financial and economic meltdown in 2001 to 2002 that hurled millions of middle class Argentines into poverty. IMF financing would strengthen his “programme of growth and development, giving us greater backing to confront this new global scenario and avoid a crisis like those we have had in our history”, he said.
President of Argentina Mauricio Macri announces talks with the International Monetary Fund on financial support for the country's economy. The Central Bank of Argentina interest rate is now at 40%, inflation at 25% and the value of the Argentine peso at a record low.