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IMF Team Meets Uruguayans Seeking Debt Refinancing

April 30, 1985

MONTEVIDEO, Uruguay (AP) _ A group representing the International Monetary Fund met Tuesday with Uruguayan officials who want to refinance the nation’s $4.6 billion foreign debt.

The IMF team met with Economy Minister Ricardo Zerbino and other government officials. The team was headed by headed by Desmond Lachmann, the IMF’s director of operations for South America’s southern nations.

He said before the meeting that they were ″entering conversations with the government to understand the plans and programs it has.″

Lachmann declined to make any other statement, while the Uruguayan officials refused comment.

Accompanying Zerbino, who met two weeks ago in the United States with officials of the IMF and the World Bank to pursue a debt refinancing, were Central Bank President Ricardo Pascale and the planning and budget director, Ariel Davrieux.

President Julio Sanguinetti, who took office March 1 to end nearly 12 years of military rule, contends that the country cannot continue to meet its debt obligations without draining all its economic resources. He has said new terms of repayment are needed to allow the meat- and wool-exporting nation of three million people to plow some of its income back into a long-stagnant economy.

At the same time, Sanguinetti has vowed to continue making debt payments on time, which he says will help Uruguayan in gaining the most advantageous terms in any new agreement.

He said he is also undertaking an austerity program designed to slash the public deficit, which equalled 8.5 percent of the gross national product in 1984, and curb inflation recorded at nearly 70 percent for the past 12 months.

The country’s former military rulers reached an accord with the IMF in April 1983 that was to provide $410 million in assistance over two years. The pact was suspended last year when Uruguay failed to meet certain austerity targets.

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