The government is paying US$1.4 billion in interest to the International Monetary Fund (IMF) in the coming days.

The interest payment is the last before Argentina resumes technical conversations with the agency’s staff, which are expected to happen in late February and early March. In the talks, the government will seek the first disbursement of the year, of around US$5.4 billion.

This year will prove more challenging than 2022 in the country’s relationship with the IMF. Unlike last year, the government’s payments to the Fund will surpass the IMF’s disbursements to the country by US$3.4 billion, putting greater strain on Argentina’s scarce international reserves.

To ease this pressure, which is already showing in the parallel dollars’ sharp rise in the last few days, the government is negotiating a US$2.5 billion loan with a group of foreign banks and investment funds.

That is not the only constraint the IMF’s renegotiated deal will put on the country’s finances this year. The primary deficit, which was 2.4% last year, must be cut to 1.9% in 2023.

The US$44 billion Extended Facility Fund agreement was inked by the current government in March 2022 after renegotiating the record loan Mauricio Macri’s administration took with the IMF in 2018.