February 23, 2020 / 10:48 PM / a month ago

Argentina's talks with IMF moving 'in the right direction': Mnuchin

FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin testifies before the Senate Finance Committee during a hearing on the President's FY2021 Budget on Capitol Hill in Washington, U.S., February 12, 2020. REUTERS/Yuri Gripas

RIYADH (Reuters) - U.S. Treasury Secretary Steven Mnuchin on Sunday welcomed Argentina’s talks with the International Monetary Fund after the heavily indebted Latin American country said it would launch consultations that could lead to a new funding program.

Mnuchin told Reuters that he had a productive meeting with Argentine Economy Minister Martin Guzman on the sidelines of a meeting of finance officials from the world’s 20 largest economies (G20) in Riyadh.

IMF officials also briefed G20 finance ministers and central bankers about the situation in Argentina, whose debt situation the IMF last week described as “unsustainable”.

“There are many issues that still need to be addressed,” Mnuchin said in an interview. “The conversations that they’re having with the IMF are preliminary but are moving in the right direction.”

Guzman’s minister said the meeting between the two officials last about half an hour. Guzman, in a post on Twitter, also used the word “productive” to describe the meeting with Mnuchin.

The Argentine minister on Saturday said Argentina would initiate Article IV consultations with the IMF that could pave the way for an IMF program - a move experts say will reassure bondholders that Argentina remains under IMF supervision.

The country, which has defaulted on debt obligations eight times so far, is facing tough negotiations with creditors and the IMF to restructure around $100 billion in debt that the Argentine government says it cannot pay unless given time to revive stalled economic growth.

The IMF gave Argentina a $57 billion standby financing agreement in 2018, but that program was agreed by the previous government and has been essentially on ice since the election.

Reporting by Andrea Shalal in Riyadh; Additional reporting by Hugh Bronstein in Buenos Aires; Editing by Daniel Wallis

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