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Argentina delegation set to travel to US next week for IMF talks -source

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By Jorge Otaola

BUENOS AIRES (Reuters) – The Argentine government will send a delegation next week to Washington in a bid to finalize the renegotiation of its $44 billion loan with the International Monetary Fund (IMF), a source involved in the talks told Reuters on Friday.

The delegation had initially planned to travel as early as June, in a sign of potential hold-ups.

The third largest economy in Latin America intends to change the scheduling of the advance disbursements set for the rest of the year, in the midst of soaring inflation, a weakening peso and diminished central bank dollar reserves.

“The negotiation is fine, next week our team will be there (in Washington) all week. We are very close (to an agreement),”  the source said on the condition of anonymity.

However, Grupo SBS said in a note that the renegotiation with the IMF rests on changing the exchange rate through a currency devaluation, but that “the government continues to refuse.”

Argentines will go to the polls in August to vote in the primary elections, where Economy Minister Sergio Massa is a candidate to become president, before the general election in October.

The grain-producing country is seeking to renegotiate its credit program with the IMF after a historic drought hit soybean and corn crops, its main source of export income.

In June, Argentina was forced to pay the IMF $2.7 billion in debt using the last reserves of its Special Drawing Rights (SDR) and the Chinese yuan currency so as not to weaken its US dollar reserves.

The government also this week postponed its $2.6 billion loan repayments for July until the end of the month, which include $1.3 billion that were due Friday.

(Reporting by Jorge Otaola; Edited by Eliana Raszewski and David Gregorio)

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