IMF backs funds for 4,000 million dollars for Argentina

The International Monetary Fund (IMF) reached an agreement at the level of officials on the extended program of funds with Argentina for 44,000 million dollars, which should enable funds for almost 4,000 million dollars for the country, the financial institution said on Monday.

The approval, which has to be ratified by the IMF’s executive council, would enable funds of 3.9 billion dollars for Argentina, which is trying to rebuild its reserves and lower a very high rate of inflation.

Argentina, a leading world grain exporter, reached a new deal with the IMF this year to replace a failed 2018 program. The new program was critical for the country to meet IMF obligations.

The deal entails economic goals, including rebuilding depleted reserves and cutting a deep fiscal deficit to improve the country’s finances.

“Most of the quantitative goals of the program revised at the end of June 2022 were met, with the exception of the floor of net international reserves, mainly due to a growth in the volume of imports higher than programmed,” it said in a statement.

A subsequent period of volatility in the currency and bond markets has been tempered by decisive policy decisions to correct earlier setbacks and to rebuild credibility.

The IMF praised the steps taken by the Argentine economy minister Serge Massawho took office in August after a period of instability that included the resignation of Martín Guzmán as head of the economy and the passage, for two weeks, of Silvina Batakis in the position.

Regarding Argentine reserves, which have proven difficult to rebuild, the IMF said they should grow by about 9.8 billion dollars in the 2022-23 period, in line with program goals. However, the global economic climate has weighed on growth and boosted inflation.

Despite this, within the framework of decisive actions by the new economic team, market pressures are dissipating, and the growth forecast remains stable at 4% for this year, before moderating to a potential rate of 2% for the 2023 and beyond,” the IMF added.