From: NY Transfer News <[EMAIL PROTECTED]> Reply-To: [EMAIL PROTECTED] Date: Thu, 6 Dec 2001 05:12:41 -0500 (EST) To: [EMAIL PROTECTED] (NY Transfer News) Subject: [CubaNews] IMF Denies Loan to Argentina Via NY Transfer News * All the News That Doesn't Fit source - Bill Koehnlein <[EMAIL PROTECTED]> Financial Times - December 5, 2001 http://www.ft.com IMF denies loan to Argentina by Thomas Cat�n in Buenos Aires and FT.com staff The International Monetary Fund said on Wednesday it would not make a $1.26bn loan instalment to Argentina, which is due in the middle of the month, on time. "The IMF executive board met this afternoon for an informal briefing on Argentina. Based on the findings of the mission that has been in Buenos Aires, fund management is unable at this stage to recommend completion of the review of the IMF-supported program," the IMF said in a statement. The country desperately needed the aid to avoid a default on its $155bn in federal and provincial government debt, which would be the largest default by a country in history. Adding to Argentina's troubles, international ratings agencies on Wednesday said that Argentina's new banking and capital controls had breached its decade-old currency board system and opened the way for a devaluation of the peso. Moody's Investors Service said the new measures, which took effect on Monday, constituted the end of the "convertibility" system that has kept the peso pegged to the dollar at par for a decade. "There are not enough 'real dollars' in the formal system to make good on the one-to-one parity embedded in Argentine law," the agency said. "Convertibility has been replaced by a monetary regime which uses the 'Argentine dollar' as a unit of account. The new Argentine dollar will have a floating exchange rate against US dollars." Rival agency Standard & Poor's also responded to the new measures, downgrading a series of Argentine companies. It also raised concerns that the measures would fail to stem the outflow of funds from the financial system. "There is an increased risk of collapse of the exchange-rate regime and capital controls, if outflows continue to be strong," said S&P. "The ratings agencies never understood convertibility," said Domingo Cavallo, economy minister, who introduced the system in 1991. "For those who understand the system, there could be no doubt that convertibility was strengthened this weekend." The government was forced to place a monthly limit of $1,000 per account on cash withdrawals and transfers out of the country after nervous Argentines withdrew $1.3bn on Friday alone. Amounts above that may be spent by cheque, debit card or credit card. The government was also struggling to close several loopholes that Argentines have been exploiting to circumvent the caps. The International Monetary Fund said on Wednesday it would not make a $1.26bn loan instalment, which is due in the middle of the month, on time. The country desperately needs the aid to avoid a default on its $155bn in federal and provincial government debt, which would be the largest default by a country in history. ************************************************************************ "Our only hope today lies in our ability to recapture the revolutionary spirit and go into a sometimes hostile world declaring eternal hostility to poverty, racism, and militarism." --Martin Luther King, Jr. ************************************************************************ The Theater of the Oppressed Laboratory http://www.toplab.org ************************************************************************ [In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information see: http://www.law.cornell.edu/uscode/17/107.shtml ] ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: [EMAIL PROTECTED] ================================================================= _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
