IMF board to meet Friday to discuss Argentine debt deal

The International Monetary Fund's board of directors will meet Friday (March 25) to discuss Argentina's requested deal to restructure its US$45 billion debt.

Argentina's Senate on Thursday gave final approval to an agreement with the multilateral lender that restructures the debt, clearing the country's short-term financial horizon but leaving a serious inflationary challenge. The agreement now just needs signing by the IMF board of directors.

The agreement has further exposed a divide within the ruling coalition led by President Alberto Fernández, with several lawmakers in the far-left wing of the bloc voting against the deal. 

Still, the IMF applauded the vote passing through Congress. 

"The legislative approval is an important signal that Argentina is committed to policies that will encourage more sustainable and inclusive growth," IMF Spokesperson Gerry Rice said in a statement on Saturday.

The meeting will be held Friday, he said, "to allow time to take account of the fast-changing global environment – including the war in Ukraine."

An agreement on a refinancing program was sealed between the government and IMF on March 3.

The US$45-billion debt is the legacy of a record loan contracted in 2018 under former president Mauricio Macri.

The agreement is the 13th that Buenos Aires has signed with the IMF since the return of democracy in 1983. If approved, it would be Argentina’s 22nd IMF programme in total.

The Argentina's also chose to bundle two payments due to the IMF on Monday and Tuesday for a total of about US$2.8 billion into one single payment due on March 31, according to the IMF statement. The IMF said such a change is consistent with its rules and Argentina won’t enter into “arrears” or default as a result. 

Upon board approval, Argentina would soon receive about US$9.8 billion from the IMF to cover payments from a previous programme and bolster the Central Bank’s reserves. The rest of the disbursements are conditioned to the government meeting certain fiscal and monetary targets in quarterly reviews. 

– TIMES/AFP/BLOOMBERG