First modification:
Argentina and the International Monetary Fund reached an agreement for the disbursement of 4.7 billion dollars so that the country chaired by Javier Milei can face upcoming debt maturities. Meanwhile, on January 11, the country is expected to release inflation data for December, which increased after the devaluation applied by the far-right president.
On Wednesday, January 10, the Argentine Minister of Economy, Luis Caputo, reported that the country and the International Monetary Fund (IMF) reached an agreement that will allow the country to meet debt maturities.
The agreement reached by both parties must be approved by the Executive Board and after the “new goals” presented at the end of January, will allow the disbursement of almost 4.7 billion dollars by the IMF.
Argentina, which continues to struggle to reduce its high inflation and with negative net foreign exchange reserves, needed to renew the agreement with the IMF after the previous Administration did not meet several economic objectives linked to the program. Argentina maintains a loan agreement of 44 billion dollars.
Through a joint statement, the Milei Government maintained that “the program seriously deviated” and that “the goals of the end of September in terms of primary fiscal deficit were not achieved and preliminary data suggest that the year-end goals were breached by an even greater margin”, alluding to the Administration of Alberto Fernández (2019-2023), which ended its mandate with more than 140% annual inflation.
In that same document, the IMF assesses that the new national administration “is already implementing an ambitious stabilization plan, based on a large initial fiscal consolidation, along with actions to rebuild reserves, correct relative price imbalances, strengthen the bank's balance sheet and create a simpler, rules-based, market-oriented system.
Caputo maintained that what was announced does not represent a new agreement, but that the IMF expressed its openness to a new debt program and more financing.
“I want to make it clear that this is not a new agreement, we have relaunched the previous one that was suspended due to non-compliance with objectives,” said the head of the economic portfolio. And he added: “Relaunching this agreement requires more commitment and compensates for the loss of credibility of the last two quarters, in particular.”
With Reuters and EFE
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