By The newspaper
Aug 24, 2023, 01:40 AM EDT
In a significant move aimed at reinforcing Argentina’s economic stability, the International Monetary Fund (IMF) approved a $7.5 billion outlay for the country.
The spokesman for the Argentine Ministry of Economy confirmed the measure in favor of the South American country on Wednesday.
The disbursement occurs within the framework of the fifth and sixth review of the refinancing agreement that Argentina maintains with the IMF. The board’s decision was announced through an IMF statement, coinciding with a scheduled meeting between Argentine Economy Minister Sergio Massa and IMF Managing Director Kristalina Georgieva.
The disbursement is part of a series of financial injections to support the Argentine economy. The total amount disbursed after this latest announcement amounts to $36 billion.
This immediate financial boost comes as Argentina grapples with economic challenges.
The next review of the agreement is scheduled for November, and Argentina expects an additional payment of US$2.75 billion. Minister Massa emphasized that these funds will provide a “stability framework” for Argentina until the end of November, contributing to the strengthening and increase of the Central Bank’s reserves.
This review revealed that Argentina found it difficult to achieve key objectives due to an “unprecedented drought” experienced last year and in the first months of this year, which led to policy deviations.
Recognizing these challenges, the IMF’s board of directors granted default waivers and introduced modifications to targets related to reserve accumulation, primary fiscal balance, and monetary financing of the country’s deficit.
These adjustments go hand in hand with Argentina’s commitment to implement a new set of policies aimed at rectifying setbacks in economic policy, safeguarding stability, and achieving program objectives.
During his meeting with Georgieva, Minister Massa thanked the efforts of the negotiating team to reach the agreement. He underlined the need for Argentina to maintain a healthy relationship with the IMF and emphasized the importance of avoiding impositions that could negatively impact the well-being of citizens.
As Argentina navigates its financial landscape, the government remains cognizant of its debt commitments. The country maintains a debt of $45 billion dollars with the IMF, from the administration of former President Mauricio Macri (2015-2019). The refinancing agreement, established in 2022, undergoes regular reviews and is aligned with mutually agreed economic policies.
In the context of Argentina’s political landscape, marked by the recent primary elections, the IMF’s decision to provide financial support underscores the fundamental role of economic stability in the country’s progress.
The electoral landscape saw the rise of liberal candidate Javier Milei, shaping discussions about Argentina’s economic direction. In the midst of this dynamic, IMF assistance seeks to contribute to the financial resilience and growth of the nation.
With information from EFE and the IMF
Keep reading:
· Who is Javier Milei and what are the radical proposals with which he won the primaries in Argentina
· Javier Milei surprises in the primaries of Argentina by leading the elections with 32% of votes
· How feasible is the dollarization of Argentina proposed by Milei and how does it compare with that of Ecuador?