IMF paves way to disburse US$ 7.5bn to Argentina in ‘challenging’ backdrop

AFP: Argentina could receive a much-needed disbursement of funds from the IMF, the lender said Friday, with a fresh staff-level agreement paving the way for access to US$ 7.5 billion.
The deal, involving combined reviews of the country’s US$ 44 billion loan programme, aims to “support Argentina’s policy efforts and near-term balance of payments needs” as the country grapples with a tough economic backdrop, the International Monetary Fund said.

The latest agreement is also subject to approval by the IMF executive board, and could help keep the South American nation afloat while its presidential race is underway -- with the winner of the election to take office in December.
“Argentina’s economic situation has become very challenging,” the fund said. “Key programme targets through end-June were missed on account of the larger-than-anticipated impact of the drought, as well as policy slippages and delays.”

Completion of the combined reviews will allow Argentina access of about US$ 7.5 billion.
This comes under part of an earlier 30-month arrangement, approved in March 2022, totaling US$ 44 billion.
The recent discussions “focused on reaching agreement on a policy package to rebuild reserves and enhance fiscal order,” said the IMF statement.
The fund added that “safeguarding stability and addressing underlying imbalances high inflation and low reserve coverage are fundamental to secure a more sustainable, resilient, and inclusive growth over the medium term.”

Argentina is the target of the largest IMF assistance programme as it grapples with annual inflation exceeding 100 percent, a severe shortage of foreign exchange and a poverty level of about 40 percent.