The International Monetary Fund’s executive board approved a $7.5 billion disbursement to Argentina on Wednesday, extending a financial lifeline to the cash-strapped government ahead of a tight presidential race.
(Bloomberg) — The International Monetary Fund’s executive board approved a $7.5 billion disbursement to Argentina on Wednesday, extending a financial lifeline to the cash-strapped government ahead of a tight presidential race.
The cash payments are part of a refinanced $44 billion program, the lender’s largest, that endured months of negotiations amid political uncertainty and wrangling over economic policy. The board decision follows a July preliminary agreement that eased some aspects of the deal, as Argentina struggled to meet its targets amid a severe drought that has battered crop exports and the economy.
The board decision completes the fifth and sixth reviews of the program and enables immediate disbursement of the $7.5 billion payment, according to an IMF statement. The board also approved modifications to the original program targets and waivers of non-observance associated with some of Argentina’s recent policy measures. The next program review will be in November, according to the IMF.
Economy Minister Sergio Massa, who has led negotiations with the fund and is also running for president, met with the IMF’s managing director Kristalina Georgieva at the Washington headquarters on Wednesday afternoon in Washington D.C. He is expected to hold a press conference at 6 p.m., according to a statement from the country’s economy ministry.
The August disbursement will be used to pay back the IMF from a previous bailout as well as other lenders that helped Argentina make some IMF payments. Argentina has borrowed special drawing rights from Qatar, tapped a currency swap line with China, and obtained a bridge loan from a Caracas-based development bank.
Massa, the Peronist-governing coalition’s candidate, told reporters Tuesday that he did not expect the election outcome to affect the November disbursement. Javier Milei, a libertarian outsider who wants to close the central bank, emerged from August’s primary as the race’s likely frontrunner.
Read More: IMF to Loan Argentina as Much as $10.8 Billion This Year
Argentines will cast ballots in the general election on Oct. 22. The race will go to a November runoff if the leading candidate doesn’t secure more than 45% of the vote or win 40% with a 10 percentage point lead.
–With assistance from Philip Sanders.
(Updates attribution with official IMF statement)
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