The Inter-American Development Bank (IDB) approved a US$ 647.5 million loan for Argentina on Wednesday, reallocating resources previously approved for the country.

The negotiations included another agreement for an additional US$2.2 billion for the rest of the year.

The granted loan is a Special Development Financing (SDL) loan, aimed at contributing to “strengthening public finances and the balance of payments, reinforcing macroeconomic stability, and growth,” said a communiqué by the Economy Ministry.

The funds come at a time when the government is going through an international reserve scarcity crisis. Net international reserves are close to negative US$4 billion and on the same day the IDB agreement was announced, the Central Bank sold US$64 million. Earlier this month, the government announced that it would be selling dollars in financial markets to “sterilize” peso emission and lower parallel U.S. dollar exchange rates, putting further pressure on reserve accumulation.

The disbursement will be carried out in the first days of August and will be used to support early childhood and literacy policies promoted by the Human Capital Ministry.

They will also be used to improve public revenues and “make public sector spending more efficient” by improving the targeting of subsidies to the most vulnerable households, the communiqué added.

According to the press release, the loan was the result of joint work between the IDB’s staff and Finance Secretariat authorities, led by Pablo Quirno.