“What we want from and with Argentina is Mercosur, a good relation, but having democracy and freedom above all”, Brazilian president Jair Bolsonaro said on Monday. He expects foreign ministers of both countries agree on a new date for a meeting with his peer Alberto Fernández after the suggested summit in Montevideo on March 1 fell through due to the Argentina Congress opening sessions on the same day.
The International Monetary Fund won’t offer Argentina a haircut on its $44 billion loan, according to Managing Director Kristalina Georgieva. “Our legal construct is such that we cannot do measures that may be possible for others without this big global responsibility,” she said. An IMF technical mission is in Buenos Aires through Feb. 19 to meet with Argentina officials and assess the country’s debt sustainability. Talks with the IMF will be key for an even bigger negotiation with bondholders to avoid a default.
Private banks in Argentina will begin to apply from today a reduction from 40% to 35% on their credit rates for micro, small and medium enterprises. The change occurs after the Central Bank (BCRA) imposed 35% as a new credit ceiling that must be approved by banks that want to access the discount of up to two points in their reserve requirements. Public lenders such as Banco Nación already offer a subsidised rate of 27.9%.
Argentina president Alberto Fernández announced a 13% increase in pensions for low-income people (below AR$20,000) and two other allowances for families and children that will go into effect next month. Higher pension bands will increase between 9.8% and 3.8%. A new program that will make free 170 medications for pensioners will also be launched.
Money managers including BlackRock Inc. and Fidelity Investments launched a committee with White & Case LLP as legal adviser focused on Argentina’s sovereign debt. This can become one of the most powerful creditor groups since BlackRock and Fidelity both rank among the six biggest reported holders of the country’s sovereign notes.
Monarch Alternative Capital LP is spearheading a group of about 20 hedge funds advised by Dennis Hranitzky at law firm Quinn Emanuel Urquhart & Sullivan, which is getting organised ahead of debt restructuring talks with Argentina. The group is focused on notes that were part of the nation’s 2005 and 2010 debt exchanges which give a relatively small number of investors the power to veto any accord they didn’t like.
The presidents of Brazil, Jair Bolsonaro and Argentina, Alberto Fernández might hold their first meeting on March 1 in Montevideo, when they attend the inauguration ceremony of new Uruguay president, Luis Alberto Lacalle Pou. Bolsonaro made the suggestion of the place and date when he received in Brasilia on Wednesday, the Argentine Foreign Minister, Felipe Solá, the first sign of reducing tensions between both heads of State, of opposing ideologies
Brazilian President Jair Bolsonaro on Wednesday hosts Argentina’s Foreign Affairs Minister Felipe Solá, who will also meet his counterpart Ernesto Araújo. They will discuss bilateral trade, the Mercosur customs union and Venezuela, according to official sources in Brasilia. Relations between the two key trade partners worsened late last year as Bolsonaro’s far-right administration clashed with Alberto Fernandez’s left-leaning government.
State-owned Aerolíneas Argentinas will add new flights to New York and Madrid this year and get its five Boeing 737 MAX airplanes back online, said Pablo Ceriani, the CEO of the company appointed in December by Argentine president Alberto Fernández. With a current operating deficit of $570 million, Ceriani expects income to hit $1.7 billion in 2020 thanks to the sale of nearly 13 million tickets.
The state-owned Banco Nación began offering loans for small and medium-sized businesses with a subsidised rate of 27.9% per year for its SME clients and 29.5% for those that are not. The Minister of Productive Development, Matías Kulfas said that the rate is subsidised at 12.1% and that AR $ 10 billion will be allocated for the “acquisition of raw materials, salary payments or other expenses of SMEs”, which may request up to $ 5 million within 12 months.