Argentina seeks support from the US and Brazil in negotiations with IMF: government sources

Argentina seeks a new flexibility of goals and faster disbursements of the agreement with the International Monetary Fund (IMF) for $44 billion, so it is lobbying for the support of key members of the body such as the United States and Brazil, government officials said.

The country is expected to continue talks with IMF officials on Thursday to agree changes to the agreement, which was called into question after a historic drought that has hit the production and exports of the country’s key crops such as soybeans and corn. said a senior official at the Ministry of Economy.

Three government sources confirmed that the country was seeking to accelerate disbursements for some 10.640 million dollars planned between June and December of this year.

The new talks, which come just weeks after the IMF already relaxed the objectives of the agreement, come as the central bank’s foreign reserves hit a seven-year low due to a historic drought that sank exports of soybeans, corn and wheat, the main source of dollars.

That is threatening the country’s ability to cope with future debt obligations and foreign trade payments For this reason, pressure grew to renegotiate the agreement with the IMF, which is the largest granted to any country in the world.

The ministry official said backing from the United States and Brazil was key to the IMF talks, and was “positive” given the countries’ broader support for Argentina’s economy.

The US Treasury and the White House did not comment on potential support for the negotiations Argentina with the IMF. Brazil’s presidency did not respond to a request for comment.

An IMF spokesman said the agency was working “very closely” with Argentine authorities to strengthen the program in light of the impact of the severe drought.

“Discussions in the context of the next review are ongoing and continue in a constructive manner,” the spokesperson said.

The support of the United States is important because it is the largest partner of the IMF. Brazil, for its part, is Argentina’s main trading partner.

The IMF board must approve any technical agreement that Argentina reaches with the agency’s staff.

Argentina has suffered major currency and debt crises for years and its bonds are trading in territory indicating high possibility of default. The current program with the IMF replaced a failed one for 57.00 million dollars signed in 2018.