Argentina will have to wait before its $57 billion rescue package with the International Monetary Fund can continue, due to the complex uncertainty over the country's political and economic future, the fund's acting managing director said in an interview with Bloomberg Radio on Sept. 25.
David Lipton said the IMF would "work toward an eventual resumption of a relationship — some kind of financial relationship with them — which may have to wait awhile."
"Argentina's situation right now is extremely complex," he told Bloomberg Radio.
The comments come in the wake of the fund's meetings with Argentine President Mauricio Macri on Sept. 24. They discussed the newest $5.40 billion disbursement to the Latin American country, that has been pending approval since Sept. 15.
Lipton's statements confirm media reports from earlier in September that the disbursement would be put on hold ahead of the October presidential elections.
Opposition candidate Alberto Fernández secured a more than 15-point lead over incumbent President Macri in a primary election Aug. 11. The result roiled markets and saw the Argentine peso fall dramatically, in the third such severe currency depreciation in less than 18 months.
Since then, in a bid to calm the waters, Macri's government announced it was re-profiling and delaying repayments of Argentina's debts. That, and the country's recent return to capital controls, has gone against the terms of the deal with the IMF. Meanwhile, Fernández's team has yet to lay out concrete economic plans.
Lipton said the IMF would work with whomever wins the elections. "It's not our business to try to divine the political path forward, we can't do that," Lipton told Bloomberg.
The IMF director seemed to downplay Argentina's capital controls. "We've dealt with countries that have parallel markets in many, many circumstances. That's not a big challenge," Lipton reportedly added. "The bigger issue there is how to calm the market and stabilize the situation."
