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LatinNews Daily - 18 February 2021

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In brief: Argentina bondholder group slams gov’t policies

* The Ad Hoc Group of Argentina Exchange Bondholders has released a statement warning that since the government led by President Alberto Fernández concluded its “historic restructuring” of international and domestic foreign currency bonds in September 2020, “local macroeconomic conditions have continued to deteriorate”. The Ad Hoc Group is comprised of 18 investment institutions, all of which voluntarily participated in  the September bond restructuring. It warns that “poor policy choices are undermining chances for a sustainable [economic] recovery” in Argentina and that “price controls, frozen tariffs and rationing of access to foreign exchange are short-term palliatives that are bound to fail and only store up greater problems down the road”. In particular the group stresses that a new financing programme with the International Monetary Fund (IMF), with which the government is currently in talks, is “the only likely source of policy anchors and a credible medium-term framework that can bring stability”. However, it warns that the “government appears to be seriously contemplating delaying an agreement with the IMF in order to have the freedom to continue its unsustainable policies even longer”.