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ECONOMY | 13-06-2024 20:06

IMF approves US$800 million for Argentina as Milei eyes new deal

IMF executive board approves latest review of Argentina's multi-billion-dollar loan programme, paving way for release of US$800 million in fresh funds.

The International Monetary Fund’s executive board approved the latest review of Argentina’s US$44-billion programme Thursday, unlocking another disbursement as President Javier Milei eyes a new programne with fresh funding. 

IMF leadership approved a staff-level agreement that will send about US$800 million to Argentina to help refinance debts the nation owes the Washington-based lender. IMF officials applauded Milei’s economic programme, which has eased monthly inflation for five straight months, albeit as another recession threatens the country. 

Milei plans to meet with IMF Managing Director Kristalina Georgieva on the sidelines of the Group of Seven summit in Italy this weekend.

Milei and Economy Minister Luis Caputo, however, have already made clear the government wants to replace the current programme with a new one that has more money than the roughly US$44 billion that stems from a separate, failed agreement the two sides reached in 2018.

Caputo acknowledged earlier this week that negotiating a new programme will take time, but did not provide a more specific horizon. 

Milei says fresh funding, from the IMF or elsewhere, will be critical to how quickly Argentina can lift currency controls and scrap capital restrictions, policy steps necessary for the country to eventually return to international debt markets for the first time since a sovereign debt restructuring in 2020. 

The IMF board approval is the latest in a series of positive developments for Milei this week. 

China renewed a portion of an US$18-billion currency swap line with Argentina, while senators in Buenos Aires passed the majority of Milei’s economic reforms, notching a major legislative victory. And monthly inflation in May cooled to lowest level since early 2022, according to data published Thursday. 

by Patrick Gillespie, Bloomberg

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