The Deputy Director of the International Monetary Fund (IMF), Anne Krueger, has written to the Argentinian government, expressing concern that President Eduardo Duhalde has apparently refused to take certain measures which the IMF considers necessary to the country's economic recovery, such as a reduction in provincial spending, and a crack-down on tax evasion. She also urged the Economy Minister, Jorge Remes Lenicov, to allow the peso, which for eleven years was pegged to the US dollar, to float freely.
However, the Deputy Economy Minister, Jorge Todesca, has taken issue with the letter, and at the weekend, accused the IMF of meddling:
'We are working on a very coherent plan,' he said, attacking Ms Krueger's calls for a more 'coherent' economic policy. 'Frankly, we don't need the IMF to be telling us every two minutes what course we should take when we've only been at this for seven days. They're doing it from 10,000 kilometers away and without much knowledge of the situation.'
There has been criticism of the IMF's comments regarding the Argentinian situation, which has become increasingly uncertain over the past month- President Duhalde is the country's fifth President since December 20.
Some analysts have commented that the IMF's demands are reasonable, given that Argentina is poised to request up to $20 billion in new loans, and that the 'controlled devaluation' currently taking place, with its two tier exhange rate, has failed when it has been attempted elsewhere. However, critics warn that allowing the peso to float freely, as demanded by the US Treasury and the IMF, could result in a free fall of the Argentinan currency, which could exacerbate the already dire economic situation.
In an attempt to deal with the possibility of capital flight and the country's increasingly rampant tax evasion problems, President Duhalde announced on Friday that the freeze on bank deposits announced last year would be extended.
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