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Argentina seeks Biden’s support in debt talks with ‘inflexible’ IMF

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By Eliana Raszewski

BUENOS AIRES (Reuters) -Argentina has directly asked U.S. President Joe Biden for support in the country’s talks with the International Monetary Fund (IMF) to revamp its $44 billion debt deal, in a letter signed by regional leaders from Brazil, Mexico and elsewhere.

The South American nation, battling dwindling foreign currency reserves, 100%-plus inflation and a major drought that hammered its main exports soy and corn, is hoping to accelerate payouts from the IMF and ease some economic targets in the deal.

The letter, also backed by the leaders of Chile, Colombia, Paraguay and Bolivia, indicates an escalation of tensions in the talks with the IMF, a multinational lender in which the United States has the largest single voting share.

“The IMF’s inflexibility to review the parameters of the agreement in the context of the drought we’ve described runs the risk of turning a liquidity problem into a solvency one,” the letter shared by Argentina’s government on Twitter said.

“For these reasons, we ask you with respect and affection to support Argentina in the negotiations that it is carrying out.”

Argentina, the IMF’s largest debtor by far, first struck a $57 billion loan program in 2018 under former conservative leader Mauricio Macri. That was replaced by a new $44 billion deal agreed last year under current President Alberto Fernandez.

The country, due to have made some $2.7 billion in payments to the IMF on Wednesday and Thursday, had now pushed back the payments to the end of the month, an IMF source said. That marks a reversal from what a government source indicated on Wednesday.

“The authorities have exercised their right as a member to bundle two repurchases (principal payments) due in June and pay them at the end of the month (i.e. June 30),” the person said, asking not to be named.

The IMF did not immediately respond to a request for comment. The White House did not immediately respond to a request for comment.

(Reporting by Eliana Raszewski; Additional reporing by Rodrigo Campos; Writing by Adam Jourdan, editing by Deepa Babignton)

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