IMF Approves Argentina Loan. The Executive Board of the International Monetary Fund (IMF) approved a disbursement of US$5.4 billion for Argentina, a significant step in a government program facing setbacks amid a deteriorating economic outlook.
The board approved the funds after IMF staff completed a fourth review of the $44 billion Argentina deal, the institution said in a statement. This brings the total disbursement under the extended fund facility to US$28.9 billion.
Argentina’s 22nd IMF program in history, the most of any member nation – stumbled halfway a year ago when lawmakers in its own governing coalition voted against the deal.
IMF Approves Argentina Loan. Since then, the program has faced increasing uncertainty before a looming recession and presidential elections in October, with annual inflation in Argentina exceeding 100 percent last month.
The IMF earlier this month called on Argentina to make stronger efforts to tackle dwindling foreign exchange reserves, soaring inflation and other “policy setbacks” amid a severe drought that has hit the country’s crucial commodity sector.
Argentina requested changes to the main target under the program, known as foreign exchange reserve accumulation. Foreign exchange reserves, or cash deposits at the central bank, are seen as very important to prevent currency devaluation.
Earlier in March, the government estimated it would reduce its 2023 reserve target in the IMF deal by around $2 billion, according to two senior administration officials who wished to remain anonymous to discuss unpublished figures. This will lower the annual reserve target to around US$2.8 billion from US$4.8 billion set in the last IMF review.
IMF Approves Argentina Loan. Argentine President Alberto Fernandez visited US President Joe Biden at the White House this week and said his US counterpart was committed to supporting Argentina in the IMF and other multilateral institutions.