March 28, 2002

IMF defends its Argentine policy

WASHINGTON (AP) --The International Monetary Fund, accused of dragging
its feet on helping Argentina, said Thursday the fund has to balance quick action
with developing an economic program that will work.

"Faster is better than slower, but it is important to get it right," said IMF spokesman
Thomas Dawson.

He said an IMF technical mission would return to Argentina next week to gather
more information on the worsening economy. Then, the rest of the IMF team, led
by special operations director Anoop Singh, will go to Buenos Aires.

But negotiations to draft an agreement on a new loan won't begin until after the
IMF's spring meetings in Washington April 20-21, Dawson said.

Argentina's currency, the peso, has come under renewed pressure this week,
reflecting dwindling investor confidence in President Eduardo Duhalde's ability to
win support from the IMF for $25 billion in loans his government is seeking.

Dawson said the floating exchange rate for the peso appears to be working well,
given the economic problems.

"Under the present circumstances, the floating rate seems to be serving them well,
since the ability to defend a fixed rate would be difficult without the supporting
policy measures," Dawson said.

Duhalde said he was committed to maintaining the floating exchange rate despite
political pressure to consider reinstating a fixed exchange rate to the dollar or to a
basket or currencies or establishing a trading band.

Dawson confirmed the IMF sought the views of eight leading economists at a
meeting Monday on how to solve Argentina's worsening economic situation, part of
the lender's efforts "to get the best advice from as wide a circle of experts as

He said there was no basis in fact to criticism that the IMF was being tougher on
Argentina than it has been on other countries.

Treasury Secretary Paul O'Neill said Wednesday he was hopeful Argentina would
soon develop a reform program that would allow it to receive new IMF loans.

O'Neill said President George W. Bush and others in the administration "are very
anxious for Argentina to grab hold ... and move to a sustainable position."

Copyright 2002 The Associated Press.