IMF and Argentina reach a new agreement for the disbursement of US$ 800 million.

The new agreement is still subject to approval by the IMF Executive Board, which will examine it in the coming weeks.

The International Monetary Fund (IMF) team and the government of Argentina have reached an agreement to conclude the eighth review of their Extended Fund Facility program, paving the way for the disbursement of US$ 800 million, after the country met the “established targets.”

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In a statement, the IMF announced that the new agreement is still subject to approval by the IMF Executive Board, which will review it in the coming weeks. Once the review is completed, Argentina “would have access to disbursements according to the program.”

The IMF team highlighted that Argentina has achieved “better-than-expected results” and explained that “all performance criteria have been exceeded.” “Based on this, understandings have been reached to continue reducing inflation, rebuilding international reserves, supporting recovery, and keeping the program firmly on track,” it states.

However, the report also warns that efforts are needed to “improve the quality and equity of fiscal consolidation, adjust monetary and exchange rate policy frameworks, and address growth bottlenecks.”

“Despite inheriting a highly complex economic and social situation, the authorities’ firm implementation of the stabilization plan—based on a strong fiscal anchor, the absence of monetary financing, and correcting relative prices—has allowed for faster progress than expected in restoring macroeconomic stability and firmly repositioning the program,” emphasizes the IMF in the statement.

“Among the most notable results are the first quarterly fiscal surplus in 16 years, rapid inflation decline, the reversal of international reserves trend, and a significant reduction in sovereign risk,” they added.

Regarding the points of understanding in the agreement, the IMF assured that “the objective of achieving fiscal balance without net financing from the Central Bank remains unchanged” and emphasized that the program “will continue to focus on improving the quality and equity of fiscal consolidation.”

“The priority remains strengthening the disinflation process and bolstering international reserves and the Central Bank’s balance sheet,” the Fund says, adding that the program’s objectives and conditionality have been updated to reflect “recent developments” and the new economic landscape.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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