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Argentine Stocks Up Slightly

August 3, 2001

BUENOS AIRES, Argentina (AP) _ Argentine stocks and bonds rose slightly in early trading Friday, buoyed by the arrival of a top U.S. Treasury official and increasing signs of international support aimed at helping the country avoid a debt default.

The bellwhether Merval Index was up 0.31 percent in midday trading at 313.83, joined by an early surge in Argentine bonds. The slight boost reflected investor optimism that a visit by U.S. Treasury Undersecretary John Taylor could signal an imminent disbursement of new loans to Argentina by the International Monetary Fund.

Before departing Washington for two days of meetings with Argentine officials, Taylor said he said there was a good chance South America’s second-largest economy could received billions of dollars in IMF loans ahead of schedule.

Argentina is mired in a three-year recession, and the government has imposed a tough austerity program in the hopes of convincing foreign investors it will keep up payments on some $130 billion in foreign debt.

In Washington, U.S. President George W. Bush conferred with British and Spanish leaders about the protracted financial crisis. White House officials said they agreed that any international response should focus for now on pending IMF loans.

Argentina is scheduled to receive $2.4 billion in aid later this year.

British Prime Minister Tony Blair and Prime Minister Jose Maria Aznar of Spain telephoned Bush to discuss efforts to stabilize Argentina’s economy, said White House press secretary Ari Fleischer.

All three leaders endorsed Argentine President Fernando De la Rua’s government austerity program, he said.

The cut-costing program is intended to cover a projected $1.5 billion deficit for this year by cutting state worker salaries and pensions 13 percent.

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