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Argentina - a serial defaulter which has long battled high inflation, currency weakness and indebtedness - struck a $57 billion deal with the IMF in 2018 to try and fix its economic woes. Those reviews of how Argentina is doing against its economic targets are linked to scheduled disbursements of funds. Failure to meet the targets could stall the program or force the IMF to adjust the targets further. The IMF net reserve targets are the amount Argentina needs to accumulate over time above a baseline of $2.277 billion at the end of 2021. "That will make it hard to meet the IMF's (downwardly revised) FX reserve target and increases the risk of a disorderly devaluation."

Easing the reserves accumulation target was part of the fourth review under the country's $44 billion program, with Argentina looking to soften expectations on its economic performance. The IMF board "approved modifications to the reserve accumulation targets to partially accommodate the impact of the severe drought," the fund said in a statement, without detailing the new targets. The change in the targeted reserves lowers the bar for the South American economy to pass future IMF reviews. But weighing on further forex accumulation, Argentina's central bank sold in March the largest monthly amount of dollars since October 2019 as it struggles to prop up the local peso currency. The IMF review included "waivers of non-observance associated with the introduction of policy measures that gave rise to new exchange restrictions and multiple currency practices."

BUENOS AIRES, March 31 (Reuters) - The International Monetary Fund (IMF) approved Argentina's fourth review under its $44 billion loan program on Friday, unlocking the disbursement of $5.4 billion to the indebted country, the lender said in a short statement. The country's central bank foreign reserves jumped by $2.5 billion on Friday versus a day earlier, data from the bank showed. That reflected the new IMF funds minus $2.7 billion of repayments Argentina had to make to the lender on Friday. A central bank source told Reuters the funds had arrived and been reflected in reserve levels. Reporting by Jorge Otaola, Rodrigo Campos and Jorgelina do Rosario; Writing by Adam JourdanOur Standards: The Thomson Reuters Trust Principles.

The financially strapped South Asian country will also start formal negotiations for the debt it owes to bilateral creditors and overseas bondholders after the domestic debt operation, aiming to complete those parallel debt talks by September. Central bank and treasury officials said they expected that "exploring options for a domestic debt operation" will help achieve much-needed liquidity relief, including both local currency T-Bills and T-Bonds. Government officials told investors that only T-Bills held by the central bank would be considered for a debt rework, while a voluntary domestic debt operation was expected for the holders of $24 billion of T-Bonds. Sri Lanka is struggling with its worst economic crisis in more than seven decades. To that end, Sri Lanka has already frozen public recruitment and has hiked taxes and power tariffs by 66% this year.

☆ S&P Global Ratings: no direct threat to Latam financial system from SVB, Credit Suisse
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +1 min

LONDON, March 16 (Reuters) - The collapse of Silicon Valley Bank last week and the turmoil around Credit Suisse do not pose a direct threat to Latin America's financial system, S&P Global Ratings said on Thursday. "The direct impact of any particular institution, I don't think is the main risk here," Joydeep Mukherji, managing director & sector lead, Sovereign Ratings Americas, said during a media briefing. However, the fallout of the recent events would likely be felt through its impact on market confidence and knock-on effect on monetary policy and interest rates from the U.S. Federal Reserve and other major central banks, Mukherji added. "It makes a big difference to the region, whether U.S. interest rates go up dramatically, or they don't go up - so I think that's the larger impact." Reporting by Karin Strohecker, editing by Jorgelina do RosarioOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: China paves Sri Lanka's way to IMF funds, but debt talks remain uncertain
▼ + stars: | 2023-03-08 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +4 min

Cash-strapped nations such as Zambia and Ghana are also facing talks on reworking debt with Chinese lenders, and Sri Lanka's negotiations showed that international efforts to standardize some debt rework parameters are failing. China is the biggest bilateral creditor to Sri Lanka, which defaulted on its international debt last year. Sri Lanka owed China's EXIM $4.1 billion, or 11% of the country's foreign currency debt, at the end of 2022, according to government data. Reuters GraphicsBOARD APPROVAL VS DEBT DEALAn executive board approval unlocks IMF financing, though it doesn't necessarily mean it will expedite debt talks. Once the executive board approval is secured, the IMF will publish Sri Lanka's debt sustainability analysis.

It was not clear what new support China, the world's biggest sovereign creditor, had extended to Sri Lanka on Monday. By end-2020, Sri Lanka owed the Export-Import Bank of China $2.83 billion or 3.5% of the island's external debt, according to IMF data. Sri Lanka needs to repay about $6 billion on average each year until 2029 and will have to keep engaging with the IMF, Wickremesinghe said. Countries in debt distress such as Zambia and Sri Lanka have faced unprecedented delays in securing IMF bailouts as China and Western economies have clashed over how to provide debt relief. Sri Lanka has been waiting for about 187 days to finalise a bailout after reaching a staff-level deal with the IMF.

☆ Sri Lanka expects approval of $2.9 billion IMF deal after China support
▼ + stars: | 2023-03-07 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +4 min

"Sri Lanka has completed all prior actions that were required by the IMF," Wickremesinghe said. It was not clear what new support China, the world's biggest sovereign creditor, extended to Sri Lanka on Monday. By end-2020, Sri Lanka owed the Export-Import Bank of China $2.83 billion or 3.5% of the island's external debt, according to IMF data. Sri Lanka needs to repay about $6 billion on average each year until 2029 and will have to keep engaging with the IMF, Wickremesinghe said. Sri Lanka has been waiting for about 187 days to finalise a bailout after reaching a staff-level deal with the IMF.

☆ Analysis: Cash-strapped countries face IMF bailout delays as debt talks drag on
▼ + stars: | 2023-03-02 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +7 min

IMF funding is often the sole financial lifeline available to countries in a debt crunch, and key to unlocking other financing sources, with delays putting pressure on government finances, companies and populations. Though staff agreements can be reached without financing assurances, the IMF board needs them to approve the programme. Chinese Premier Li Keqiang said on Wednesday the country is willing to "constructively" participate in solving debt problems of relevant countries under a multilateral framework. But Beijing has always emphasised all creditors should follow the principle of "joint action, fair burden" in debt settlements. Adding another layer of complexity to these debt talks, the Common Framework doesn't lay out precise rules on how a debt restructuring with bilateral creditors should work.

Discussions include the impact of the drought on 2023 goals for net reserves, said an Argentina economy ministry adviser who asked not to be named because the talks were ongoing. Officials for the Economy Ministry declined to comment. The discussions to change the central bank net reserves targets for this year are pre-emptive, as the country did meet its end-December 2022 net reserves targets, another source added. Net reserves today stand at around $4.4 billion, according to calculations from Buenos Aires-based brokerage firm PPI Inversiones. Under the latest review, Argentina had been set the target of net reserves to increase by $5.5 billion at the end of March and $9.8 billion at the end of the year.

"There have been a number of approaches, but so far without getting any response" from the government, the source added. But progress has been complicated by a two-year civil war that broke out in November 2020, killing thousands of people and displacing millions. The international bond only makes up a small part of the country's total external government debt, which stood at $27.4 billion in the third quarter of last year, according to World Bank data. International bondholders have not formed a private creditors committee for the extension proposal because Ethiopia has continued to service the bond normally, two of the sources added. Recent filings show that Franklin Templeton Fixed Income Group and Allianz Global Investors U.S. LLC are some of the holders of the bond, according to EMAXX data.

REUTERS/Peter Nicholls/File PhotoWASHINGTON/LONDON, Feb 17 (Reuters) - U.S.-based investment firm BlackRock said on Friday it would join a new sovereign debt roundtable set up to accelerate progress on stalled relief efforts for distressed countries, with Britain's Standard Chartered also joining, according to sources. "We welcome the Global Sovereign Debt Roundtable and look forward to engaging constructively in the dialogue alongside other key stakeholders," a spokesperson for BlackRock (BLK.N) told Reuters. Unlike the G20's Common Framework platform for bilateral debt restructuring, the roundtable talks include public and private creditors as well as borrowing countries. Some 52% of private-sector-held sovereign debt is under contract in New York state. "Private creditors are major players in many debt restructurings and need to share the responsibility for achieving a successful restructuring," Malpass added.

☆ Turkey earthquake could result in loss of up to 1% of country's GDP in 2023
▼ + stars: | 2023-02-16 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +2 min

LONDON, Feb 16 (Reuters) - The potential economic effects of the earthquake in Turkey could result in a loss of up to 1% of the country's gross domestic product this year, the European Bank for Reconstruction and Development (EBRD) said in a report published on Thursday. "The earthquake affected to a large extent agricultural areas and areas where there is light manufacturing, so spillovers to other sectors are limited," EBRD chief economist Beata Javorcik told Reuters. Growth for Turkey, the single biggest recipient of EBRD funds, has been revised down to 3% from 3.5% in 2023, without considering the impact of the earthquake in the estimates. The bank added that growing external financing requirements and political uncertainty associated with elections in 2023 create significant economic vulnerabilities. Reporting by Jorgelina do Rosario in London Editing by Karin Strohecker and Matthew LewisOur Standards: The Thomson Reuters Trust Principles.

☆ Sticky inflation prompts EBRD to trim 2023 growth outlook for its region
▼ + stars: | 2023-02-16 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +3 min

The EBRD reduced the region's growth estimates to 2.1% from 3% for this year, even lower than the 2.4% forecast for 2022. "Also, there is still uncertainty associated with the war in Ukraine, particularly for countries that are in geographic proximity," EBRD chief economist Beata Javorcik told Reuters. Growth for Turkey, the single biggest recipient of EBRD funds, has been revised down to 3% from 3.5% for 2023, without considering the impact of the earthquake in the estimates. The EBRD estimates Ukraine's economy to grow 1% this year after a 30% contraction in 2022. "Unless there is a significant strategic change on the ground, growth in Ukraine's GDP in 2024 is likely to be sluggish, but positive at least," EBRD said.

☆ JPMorgan estimates Turkey direct quake damage at $25 bln, expects rate cut
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +1 min

LONDON, Feb 16 (Reuters) - Direct costs from the destruction of physical structures in Turkey from the devastating earthquake on Feb. 6 could amount to 2.5% of growth domestic product or $25 billion, JPMorgan said on Thursday. "The political leadership signalled further rate cuts even before the earthquake," he said. "We do not rule out more rate cuts ahead of the elections originally scheduled for June 18. Yet, we believe that the policy rate is less relevant now as the monetary policy transmission mechanism is broken in Turkey." (This story has been corrected in the headline to say $25 bln, not $2.5 bln, and to fix dropped words in paragraph 1)Reporting by Karin Strohecker; Editing by Jorgelina do RosarioOur Standards: The Thomson Reuters Trust Principles.

☆ Adani Group hires banks to hold bond investor calls after market rout
▼ + stars: | 2023-02-15 | by ( Davide Barbuscia | ) www.reuters.com time to read: +3 min

NEW YORK, Feb 15 (Reuters) - India's Adani Group and two of its main subsidiaries caught up in a short-selling storm in recent weeks are to hold calls with bond investors on Feb. 16 and Feb. 21, according to a document seen by Reuters. The planned calls follow a long-awaited credit report issued by the Indian conglomerate earlier this week that said its companies faced no material refinancing risk, or near-term liquidity issues. According to the document sent to investors the call on Thursday for Adani Group will be attended by its Chief Financial Officer (CFO) Jugeshinder Singh and head of Group Corporate Finance Anupam Misra. An Adani Green Energy call also on Thursday will involve its CFO Phuntsok Wangyal, and an Adani Transmission call next week will be attended by its CFO Rohit Soni and CFO of Adani Electricity Kunjal Mehta. Rating agencies S&P Global and Moody's this month revised their outlooks to negative from stable for some of the group's companies, while index provider MSCI said it would cut the weightings of some Adani companies in its stock indexes.

☆ Ghana says domestic debt swap closed with over 80% participation
▼ + stars: | 2023-02-14 | by ( Christian Akorlie | ) www.reuters.com time to read: +2 min

ACCRA, Feb 14 (Reuters) - The Ghanaian finance ministry said its domestic debt exchange programme (DDEP) had closed on Tuesday with more than 80% participation of eligible bonds, taking it a step closer to securing a $3 billion International Monetary Fund bailout. Ghana is fighting its way out of a generational economic crisis by hiking interest rates at record speed, cutting spending, and restructuring debt to secure IMF funds. "Attention will now turn to the eurobonds, where restructuring talks are at a much earlier stage, and which could be even more complicated," Culverhouse said. Ghana became early this year the fourth nation to apply to the common framework platform, an initiative of Group of 20 major economies launched in 2020 to streamline debt restructuring efforts for poorer countries. Its bilateral lenders are discussing the formation of an official creditor committee, a first step needed to engage in debt relief talks, sources told Reuters on Monday.

☆ Ghana bilateral lenders in talks to form official creditor committee
▼ + stars: | 2023-02-13 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +2 min

LONDON, Feb 13 (Reuters) - Ghana's bilateral lenders are discussing the formation of an official creditor committee, a first step needed to engage in debt relief talks for the crisis-hit country, according to two sources with direct knowledge of the matter. The Paris Club of creditor nations has contacted other bilateral creditors, such as China, to engage on forming the committee and deciding who would chair it, one of the sources said. China is Ghana's single biggest bilateral creditor with $1.7 billion of debt, while Ghana owes $1.9 billion to Paris Club members, according to data from the International Institute of Finance. COMMON FRAMEWORK TALKSAn official creditor committee is a key step for Ghana to formally seek financing assurances from bilateral creditors stating they are willing to enter a debt rework process. Ghana has said it hopes for a rapid debt overhaul, though other countries undergoing common framework treatment have faced slow progress.

☆ Paris Club creditors give assurances to back IMF bailout for Sri Lanka
▼ + stars: | 2023-02-07 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +3 min

[1/3] A woman buys vegetables from a vendor at a market in the rampant food inflation, amid Sri Lanka's economic crisis, in Colombo, Sri Lanka, July 30 , 2022. REUTERS/Kim Kyung-HoonFeb 7 (Reuters) - The Paris Club of creditors has given financing assurances to support the International Monetary Fund's approval of an extended fund facility for Sri Lanka, the Sri Lankan president's office said on Tuesday. The financing assurances from the Paris Club, which includes Japan - Sri Lanka's second biggest bilateral lender - was previously reported by Reuters. "Members further expressed appreciation for the specific and credible financing assurances issued by India on Jan. 16, 2023 and its coordination with the Paris Club," the group's statement added. Sri Lanka has to restructure debt payments of about $13 billion on 11 international bonds.

☆ Exclusive: Paris Club to give Sri Lanka financing assurances amid IMF debt talks - sources
▼ + stars: | 2023-02-02 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +2 min

[1/4] A vendor of a stall exchanges money with a customer at a main market in Colombo, Sri Lanka November 30, 2016. REUTERS/Dinuka LiyanawatteLONDON, Feb 2 (Reuters) - The Paris Club of creditor nations is ready to provide financing assurances to Sri Lanka, a key step needed to unlock a $2.9 billion bailout by the International Monetary Fund (IMF), two sources with direct knowledge of the matter told Reuters. But it needs financing assurances from key bilateral lenders before the fund's executive board approves the programme. Another source said the informal group is currently reaching out to other non-Paris Club besides China on financing assurances, but did not provide any further details. We need to see credible and specific assurances that they will meet the IMF standard of debt relief," U.S.

South Africa has been struggling for years to overhaul its state-power company which is plagued by corruption and mismanagement and reeling under a 400 billion rand ($23.3 billion) debt pile. Finance Minister Enoch Godongwana told Reuters last week he was "sharpening his pencil" to provide details, so far scarce, for taking on between one- and two-thirds of Eskom's debt in his Feb. 22 budget presentation. Eskom's debt pile is not just big, it is also complex. Another 15% is international bonds, held by global asset managers such as PIMCO, BlackRock and Fidelity, according to recent filings. Eskom's international bonds could rally if the government takes on two-thirds of the debt, Wolman said, while limiting that to one third or carrying out the debt transfer over a long period of time could be negative.

[1/2] A woman takes pictures of the China Development Bank booth at the 2021 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 3, 2021. Commitments made to 100 developing nations by the Export-Import Bank of China (China EximBank) and the China Development Bank (CDB) have fallen every year since hitting a record in 2016 as the lenders scaled back financing even before the COVID-19 pandemic hit in 2020. "We expect an overall shift toward lower volume, higher quality investment from China," Kevin Gallagher, director of the university's Global Development Policy Center, told Reuters. Reuters GraphicsWORLD BANK STEPS INWhile Chinese lending has been waning, World Bank lending has ramped up, the study found. Overall, China's commitments were 83% of the $601 billion lent by the World Bank from 2008-2021.

As Africa struggles with economic headwinds caused by the COVID-19 pandemic, the war in Ukraine and, notably, Washington's own monetary policy, Africans are asking for proof the United States will stay the course this time. African countries have become collateral victims of this year's rate hikes by the U.S. Federal Reserve, aimed at curbing inflation at home. African countries are also finding it harder to access capital markets to meet their fiscal needs and refinance maturing debt. The United States, meanwhile, has largely failed to offer viable alternatives to cheap Chinese credit, officials said. One senior U.S. Treasury official said the United States had long been engaged in Africa, funding anti-HIV work and working on other health issues.

Jan 19 (Reuters) - Zambia needs "desperate debt relief" and agreements under a Group of 20 restructuring vehicle are proving difficult, the World Bank's managing director of operations said on Thursday. "In the last two years, we have seen the limitations of the common framework," Axel van Trotsenburg told a panel at the World Economic Forum's annual meeting in Davos, moderated by Reuters Editor-in-Chief Alessandra Galloni. Zambia has become a test case for the G20-led "Common Framework" restructuring vehicle launched during COVID-19 to streamline debt restructuring efforts as poorer countries buckle under the fallout from the pandemic hit. "Right now we have negotiations where there is not an established debt sustainability framework. What you see in the discussions is that different creditors are challenging all the underlying assumptions," van Trotsenburg added, without specifying which creditors he was referring to.

☆ Argentina to buy back $1 bln in foreign debt in signal to markets
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +1 min

BUENOS AIRES, Jan 18 (Reuters) - Argentina will buy back foreign bonds equivalent to over $1 billion to improve the South American country's debt profile, economy minister Sergio Massa said on Wednesday, looking to send a positive signal to markets despite low reserves levels. The unusual move, which Massa said could help boost the country's access to capital markets, comes as Argentina battles to replenish foreign currency reserves, rein in rampant inflation and prop up a weakening local peso currency. "Undoubtedly over the next few months, by inviting the private sector to accompany the Argentine state in this job of improving its (debt) profile, we will carry out other measures like the one we are taking today," he added. Argentina's sovereign bonds languish in distressed territory despite major restructurings in recent years with private creditors and the International Monetary Fund (IMF), with which it struck a $44 billion deal last year to push back repayments. Reporting by Walter Bianchi and Jorgelina do Rosario; Writing by Adam Jourdan; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

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