The technical staff of the International Monetary Fund (IMF) on Monday approved the second review of the organization’s debt relief agreement with Argentina, paving the way for the South American country to access some 3.9 billion U.S. dollars in the coming weeks, the IMF said.
“IMF staff and the Argentine authorities have reached staff-level agreement on the second review under Argentina’s 30-month EFF (Extended Fund Facility) arrangement,” the agency said in a press release.
The approval corresponds to the government’s fulfilment of quantitative program targets in the second quarter, the IMF said, adding “most … were met.”
The agreement is subject to the approval of the IMF Executive Board, which is expected to meet in the coming weeks.
“Once the review is complete, Argentina would have access to around 3.9 billion U.S. dollars,” the IMF said.
“Recent decisive policy actions aimed at correcting earlier setbacks are helping to restore confidence and strengthen macroeconomic stability, including by rebuilding international reserves,” it added.
IMF staff and Argentine authorities agreed that key objectives established at the approval of the arrangement, including those related to the primary fiscal deficit and net international reserves, will remain unchanged through 2023.
“Resolute policy implementation remains essential to entrench macroeconomic stability and begin to address Argentina’s deep-rooted challenges, notably high and persistent inflation,” said the IMF.
In March, Argentina and the IMF signed a debt relief agreement to help the country meet its obligations of 44.5 billion U.S. dollars in debt, amid tense exchange rate instability and capital outflows. The debt was contracted in mid-2018 by the previous government.
Among the macroeconomic targets contemplated in the EFF agreement is reducing the primary deficit to 2.5 percent of gross domestic product (GDP) in 2022 and to 1.9 percent in 2023.
It also calls for “a continued reduction in monetary financing of the fiscal deficit, which will be capped at 0.8 percent of GDP this year (below the 1 percent of GDP target) and limited to 0.6 percent of GDP in 2023,” according to the IMF.
