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WASHINGTON: The International Monetary Fund (IMF) and Argentina on Friday reached a staff-level agreement paving the way for the latter to receive a $7.5 billion loan.
In a statement, the IMF said: “The Argentine authorities and IMF staff reached staff-level agreement on a policy package and updated macroeconomic framework to complete the combined fifth and sixth reviews under Argentina’s 30-month EFF arrangement.”
This agreement is subject to the continued implementation of agreed policy actions and approval by the IMF Executive Board, which is expected to meet in the second half of August, the international lender added.
“Completion of the fifth and sixth reviews will give Argentina access of about $7.5 billion. The proposed combination of reviews and associated disbursement are intended to support Argentina’s policy efforts and near-term balance of payments needs, including obligations to the Fund. The next review is expected to take place in November.”
Since the completion of the fourth review, Argentina’s economic situation has become very challenging due to the larger-than-anticipated impact of the drought, which had a significant impact on exports and fiscal revenues. There have also been policy slippages and delays, which have contributed to strong domestic demand and a weaker trade balance, read the statement.
“As a result, end-June 2023 performance criteria (PCs) for net international reserves (NIR) accumulation, the primary fiscal balance and monetary financing of the fiscal deficit were not reached.
Meanwhile, the introduction of new temporary administrative FX measures, including in recent days, have occasioned nonobservance of the PCs against the introduction of multiple currency practices (MCPs). As such, waivers will be requested, as well as modifications of key targets, on the basis of the agreed corrective actions to strengthen the program,” the Washington-based lender 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.
