WASHINGTON: Argentina's reformist government has opened the way to resuming relations with the International Monetary Fund, after a decade of icy relations that saw the country censured by the crisis lender.
President Mauricio Macri's tentative deal Monday to repay bondholders long branded as vultures by Buenos Aires has signalled a new approach to economic management to global capital markets.
Resuming friendly relations with the IMF would confirm the country's return from the cold and help restore its former image as a South American economic leader.
And with its finances still strained, it could also reopen Argentina's access to IMF valuable technical and funding support.
Relations were frozen in 2006 when the country, still recovering from its default on nearly $100 billion in debt five years earlier, stopped cooperating with the Washington institution.
It also halted the annual "Article IV" economic reviews the IMF conducts with all members.
Over time relations worsened as the country supplied data on economic growth and inflation that was far from meeting IMF standards and allegedly masked real problems.
Fast-forward to Macri, who took office in December vowing to break with the policies of his predecessors which isolated the country internationally and, Macri says, left the economy very weak.
Macri has begun to reform economic statistics, admitting growth is slow and inflation high. And he has told the IMF he wants to resume Article IV assessments later this year.
"Reengagement with the IMF is crucial because it removes the longstanding view of Argentina being a completely opaque country that doesn't publish any kind of credible economic information whatsoever," said Monica de Bolle, a former IMF economist now at the Peterson Institute for International Economics in Washington.
A return to the good graces of the IMF would also encourage the return of foreign investors, said Ernesto Calvi, director of the Brookings Institution's Global-CERES Economic and Social Policy in Latin America Initiative.
"Knowing that the Fund will be there if needed is a strong reassurance for investors, especially at a time when they're already pretty scared about emerging markets," he told AFP.
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