10 August 2001, 17:56  ANALYSIS-Argentina seeking more than just money from IMF

BUENOS AIRES, Argentina, Aug 10 - Argentina will be looking for much more than just fresh money when government officials meet on Friday with the International Monetary Fund. Beleaguered for months by investors' fears of a debt default, Argentina will also be searching for a sign that the international community will not leave it in the lurch as it tries to crawl out of a three-year economic lull. Top Argentine economy ministry officials were due to arrive in Washington on Friday to seek extra IMF funding they say would be used to shield its currency reserves, which protect it against a potentially disastrous devaluation. The IMF has declined to comment on the possibility of additional aid for Latin America's third-largest economy, which has suffered from investor speculation that it might miss payments on its hefty $128 billion of public debt. But investors said that if Argentina could secure extra IMF aid that some forecast could total as much as $9 billion, it would really be the thought that counts. "Frankly, Argentina doesn't need cash right now. What it needs is confidence. That's why they're looking more than anything for a show of support from the IMF," said an economist for a Wall Street bank who asked to remain unnamed. Analysts said confidence from abroad -- and its concrete expression via cold, hard cash -- could play a small role in reversing the tide of negative investor sentiment that has sent Argentine bond and stock markets plummeting in recent months on fears of an economic meltdown. Many market watchers have speculated that the IMF and the U.S. government were content to let Argentina's economy disintegrate in order to teach Wall Street lenders not to loan cash to countries unable to control their spending. But after Argentina announced its "zero deficit" plan in July to begin spending only what it earns in tax revenues, a potential new IMF deal could begin to change that perception. "The change in attitude by the IMF would be very important," said Ricardo Cavanagh, an analyst for Raymond James Argentina. "The markets are counting on the show of support as evidence that Argentina is not alone in its battles."

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