Argentina dodges the IMF

Argentina dodges the IMF
Fecha de publicación: 
8 July 2023
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Even though I would have preferred the Argentine people did not pay a penny of the total of 44 billion USD debt owed by the former government of Mauricio Macri with the IMF —pressured by Donald Trump—, the truth is that it was a very clever and historical call by the government of Alberto Fernández to make the first payment in Chinese Yuan.

Nor have I been able to understand why the fate that Macri gave that money has not been investigated to the final consequences, while his personal fortune and that of his family continues to grow. The current ties of Argentina with the Chinese government eases the panorama. This payment in Yuan will surely not please the U.S., that has historically managed the IMF at its own free will.

I said it again: this is a surprising move that marks a milestone in the economic history of Argentina, by completing the payment of a significant portion of its debt with the IMF, using the Chinese currency, the Yuan.

This action is being described as bold and strategic step in the economic relations of Argentina and China, generating a global impact, challenging the traditional dominance of the US dollar in the international financial system.

Adopting Yuan as a payment currency not only diversifies Argentina's financial options, but also strengthens its relationship with China, one of this country's largest trading partners. This opens up new opportunities for economic and commercial cooperation, as well as for the promotion of investments and joint projects in various industries, such as energy, infrastructure and technology.

CHALLENGE

Furthermore, this move challenges the hegemony of the US dollar in international transactions and raises questions about the long-term stability of the US currency as a world reserve. While more countries mull alternatives to the US dollar, Argentina is positioning itself as a pioneer in the search for greater monetary diversification.

However, this decision is not without risks and challenges. The stability of the Yuan and its future evolution, as well as the response of other international financial players, are key factors to take into consideration.

Argentina will need to maintain a careful balance in its relations with China and other nations to ensure sustainability and mutual benefit in this new era of Yuan transactions.

In short, the payment in Yuan made by Argentina to the IMF marks a milestone in the country's economic history and challenges the dominance of the US dollar in the global financial system. This bold move raises questions about the future of the international monetary order.

Previously, Argentina had stressed to the IMF that it would not renegotiate its debt any further, although it would not stop paying it.

For now, the expectations are great for the South American nation, by demonstrating an admirable confidence in Beijing's economic policy.

And ultimately, what would have happened if Argentina had decided not to pay the debt owed by Mauricio Macri? This would look like what Cristina Fernández did, who did not pay a penny to the so-called Vulture Funds, created by bank front men who bought the nation's debt, in order to unscrupulously raise their interests.

Translated by Sergio A. Paneque Díaz / CubaSí Translation Staff

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