IMF and Argentina to start talks in July

By Reshmi Basu

New York, June 29 - The International Monetary Fund expects to start negotiations with Argentina on a new loan program in July, according to IMF managing director Rodrigo Rato.

"The Argentine authorities have informed Fund management of their desire to start negotiations with the IMF on a new economic program," said Rato in a news release.

Last August, the IMF stopped a $13.3 billion loan agreement approved with Argentina in September 2003, holding off until the country completed the restructuring of its 2001 debt default.

On June 22, the IMF approved its annual review of the country's economy. Rato said a summary of the findings will be released.

Rato added that he would consult the executive board in July on any new program negotiations as well as consult them soon regarding "broad outlines" of the loan.

Following the executive meeting, Argentina will send a negotiation team to Washington D.C., according to an analyst note. However, as most of the IMF staff takes off for a two-week vacation starting on Aug. 8, talks may be delayed until September, said the analyst. This means that the talks will coincide with October's legislative election.

Despite the stickiness of timing, the analyst expects the talks to wrap up this year.

On Wednesday, Moody's Investors Service raised the country's sovereign rating ceiling to B3 from Caa1, citing the lessening of the debt burden that resulted from the debt restructuring.

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