IMF board approves review of Argentina’s $44 billion loan program


BUENOS AIRES (Reuters) – The Executive Board of the International Monetary Fund (IMF) has approved the second review of Argentina’s $44 billion expanded financing facility program, the lender said on Friday, noting the efforts of the countries to achieve the set goals.

The approval enables the issuance of $3.8 billion, bringing total disbursements under the deal to approximately $17.5 billion.

“The decisive actions of the new economic team were essential to stabilize markets and restore confidence,” the IMF said in a statement.

Argentina, a major grain producer, reached a new agreement with the IMF earlier this year to replace a failed program from 2018.

The new program had economic goals, including replenishing depleted international reserves and reducing a deep primary fiscal deficit to improve the country’s finances.

“The end-September quantitative program targets were met, including for net international reserves and monetary financing of the fiscal deficit,” the IMF said.

Its chief executive, Kristalina Georgieva, added that the move comes after Argentina’s new economic team, appointed in July, adopted “decisive corrective measures” that were beginning to “restore confidence and political credibility”.

The South American country is still struggling with a high annual inflation rate, with forecasts that it will exceed 100% this year. But sticking to agreed fiscal and monetary policies will allow Argentina to gradually reduce inflation, an IMF source said on condition of anonymity.

“Through the implementation of sustainable fiscal and monetary measures, the (exchange rate) gap and inflation can be narrowed bit by bit,” the source said, noting that the process “would take time.”

(Reporting by Rodrigo Campos and Eliana Raszewski; Editing by Isabel Woodford, Will Dunham and Cynthia Osterman)

Copyright 2022 Thomson Reuters.

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