(Reuters) – The International Monetary Fund (IMF) executive board on Wednesday completed the fifth and sixth reviews of its $44 billion program and approved $7.5 billion in spending for Argentina, the IMF said. Announced.
According to the IMF, various economic targets included in the program have been relaxed as in the Fourth Review, with waivers for non-compliance.
According to the fund, total spending under the deal is now about $36 billion. Most of the cash will be used to repay funds for another program.
IMF staff and Argentina reached a deal in late July that eased economic targets, in part because a devastating drought created a tough environment for grain exporters.
“The Executive Board assessed that key program objectives were not achieved by the end of June 2023 due to historic drought and policy deviations, necessitating the approval of non-compliance waivers,” the IMF said in a statement. Ta.
The reserve accumulation target, primary balance and deficit target Monetary and Fiscal have also been revised, the fund said, without giving details of the new targets.
Argentina’s Economy Minister Sergio Massa said at a press conference late Wednesday that the new target would be announced by the IMF on Friday.
Argentina’s net reserves are in deficit before spending, and the South American nation has secured a $775 million loan with Qatar, plus a $1 billion bridging loan from regional development bank CAF and a swap with China. agreed to pay $1.7 billion from Qatar. IMF earlier this month.
Argentina plans to use this spending to repay some of its funds to China.
The next program review is scheduled for November, following the first round of the presidential election on October 22. The spending will be key for the center-left coalition government and its candidate Massa, but he said the new funding “guarantees a stable framework until the end of November.”
fixed peso
With triple-digit inflation and nearly 4 in 10 living below the poverty line in Argentina, which has become the country’s largest debtor to the IMF after years of economic crisis, locals have lost confidence in their currency. have lost
Last week, the government devalued the official peso by 18% to peg at 350 pesos to the dollar and raised the base rate by 21 percentage points to 118%, a politically costly move during the presidential campaign. The government said the IMF wanted a “100%” currency devaluation.
The peso hit a record low of 785 pesos to the dollar in parallel trading last week, more than double the official rate, before closing at 725 pesos on Wednesday.
Reported by Reuters Newsroom.Editing: David Evans and Sandra Mahler
Our criteria: Thomson Reuters Trust Principles.