urgent | The IMF agrees to disburse 7.5 billion dollars to Argentina

The Board of Directors of the International Monetary Fund (IMF) today approved the disbursement of a new $7.5 billion tranche to Argentina, a spokesperson for the Argentine Economy Minister announced.

The amount corresponds to the fifth and sixth revisions to the aid program for the South American country, which were ratified at the end of July under an agreement between the Argentine government and the international institution, according to the French.

This brings the amount that Argentina has received so far to $36.3 billion since the start of the aid program in March 2022.

In all, the 30-month program is based on providing total aid to Buenos Aires worth $44 billion (about $32 billion in special drawing rights, the International Monetary Fund’s unit of account based on a basket of currencies). It is the largest aid program currently implemented by the International Monetary Fund.

This agreement is important for Argentine Minister of Economy Sergio Massa, a candidate for the October presidential elections for the “Union for the Homeland” coalition, which brings together parties supporting the outgoing, left-of-center government of Alberto Fernandez.

Massa was in Washington on Wednesday, where he met privately with the Managing Director of the International Monetary Fund, Kristalina Georgieva.

On August 13, the presidential primaries caused a surprise, with Javier Mele, a 52-year-old ultra-liberal economist, receiving 30 percent of the vote.
Massa came in third place with 27% of the vote.

As a result, the Argentine authorities devalued the peso by about 20%, in order to protect it from a possible market reaction after the primaries. The Central Bank announced an increase in interest rates on deposits from 97% to 118%.

For its part, the International Monetary Fund praised “the recent measures and the commitment of the (Argentine) authorities towards maintaining stability, reconstituting foreign exchange reserves and improving the budget system,” according to Julie Kozak, a spokeswoman for the international institution, who did not explicitly refer to the fund’s decision.

The agreement signed in March 2022 between the International Monetary Fund and the government, the thirteenth between them since 1983, is specifically aimed at controlling chronic inflation in the country.

The International Monetary Fund expects growth in Argentina to be just 0.2% in 2023, with inflation expected to drop by the end of the year to 88%. But inflation hit 115.6 percent year-on-year in June, according to data from the National Institute of Statistics.

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