Creditors criticize Argentine government financial policy


Two of Argentina's largest creditor groups criticized the government for mis-administering the economy and said the country was on a disaster just seven weeks after the restructuring of a $65 billion debt.

Investors urged monetary policymakers and the International Monetary Fund to lay the groundwork for an economic recovery. They said in a joint statement that the Government's exchange policy was curbing exports and making it difficult to create foreign reserves.

Instead of foreshadowing a reopening of market access to support Argentina's manifest investment needs, the aftermath of debt restructuring is a virtual wasteland for Argentine credit, members of Argentina Exchange Bondholders and Argentina's Creditors Committee wrote.

"Creditors have already done their part, providing a historic opportunity for Argentina to start over. Now Argentina and the IMF must do their part."

Gross domestic product is about to contract by nearly 12% this year, the worst one-year drop I've ever recorded. Inflation exceeds 35% and the unemployment rate is the highest in more than a decade.

Creditors said Argentina's printing of money to pay for fiscal spending has harmed investor confidence at home and abroad, and that its policies were exacerbating the economic cost of the pandemic.

Since debt restructuring, Argentina has tightened restrictions to prevent companies from using dollars to pay debt, increased taxes on dollar purchases for savers, increased some local interest rates, and reduced agricultural export levies.

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