NEW YORK, Feb 1 (Reuters) - The International Monetary
Fund said on Wednesday it would prefer that Argentina's
government, which announced a $1 billion buyback of foreign
currency bonds, not undermine the targets of their
multi-billion-dollar program.
"We do have targets in the program for reserves. Reserves
are scarce, and we would prefer not to have actions that
undermine the reserve accumulation that we're assuming in the
program," Nigel Chalk, deputy director of the IMF's Western
Hemisphere department, said when asked whether the buyback fits
with the program objective of accumulating foreign reserves.
Argentina's bond repurchase program was announced on Jan.
18. The government has spent some $404 million in market
purchases of bonds with a nominal value of more than $1.1
billion, according to Portfolio Personal Inversiones (PPI), a
local brokerage.
Moody's considered it a "distressed exchange" tantamount to
a default, while S&P Global Ratings called it "opportunistic"
and equivalent to a debt restructuring as it affirmed its rating
on the sovereign.
"The team has been working with the Argentine authorities on
this plan with the debt buyback ... first on the scale of it,
how it's being operated and then how it fits in with the
program," Chalk said in an interview with Reuters.
He added that the upcoming program review - a regular
assessment that determines whether the next round of cash will
be freed to the Argentine authorities - will judge whether
targets were met at the end of December.
"But obviously, that review has a forward-looking element to
it, and we want to have some comfort that reserves will also be
met on a forward basis as well."
Argentina's gross FX reserves total some $42.3 billion,
according to its central bank as of Jan. 27, while calculations
by Moody's and PPI see net reserves closer to $6 billion.
"According to our estimates, the net reserve stock closes
January at $6.1 billion, receding almost $2 billion in the month
mainly due to coupon payments for $1.05 billion," the brokerage
told Reuters.
Argentina has the largest active IMF program, an Extended
Fund Facility for $44 billion at the time it was announced on
March 2022. About $24 billion has already been disbursed, most
of which has been used to repay the fund what it is owed from a
failed 2018 program.
The program's original targets ask for Argentina to
accumulate $4.0 billion more in reserves this year.
(Reporting by Rodrigo Campos in New York; additional reporting
by Jorgelina do Rosario in London; editing by Adam Jourdan and
Paul Simao)
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