IMF Board approves US$5.4 bn disbursement for Argentina

However, they have not confirmed a relaxation of reserve accumulation targets.

The International Monetary Fund (IMF) Board has approved the fourth review of Argentina’s program goals. The Board’s decision enables an immediate disbursement of US$5.4 billion.

Despite the disbursement approval, the IMF board has not confirmed if it will give the green light to relax the country’s reserve accumulation targets, which were recommended by IMF staff on May 13th. However, the IMF said in a communique that the full version of the press release “will be published later”.

The government and the IMF signed an Extended Fund Facility agreement in 2022 after renegotiating the US$44 billion debt former President Mauricio Macri acquired in 2018. The deal includes an economic program that Argentina must comply with in order to receive disbursements every three months, which are used to pay for the previous debt with the IMF.

Argentina hit its 2022 reserve accumulation target of U$ 5 billion for 2022. According to its staff review published last December, the IMF mandated that Argentina should accumulate U$5.5 billion by the end of March, a very high volume considering the drought affecting the country and the resulting impossibility of the Central Bank to accumulate reserves. For 2023, Argentina was expected to reach U$9.8 billion in reserves — a U$4.8 billion increase compared to the 2022 target.

The relaxation of reserve accumulation targets has been one of the government’s main demands to the IMF since last year. Since the talks ended in February 2022, the goals of the current agreement were negotiated without taking into account the impact of the war in Ukraine on the Argentine accounts, which the government contended should lead to a target review. The Ministry of Economy estimated that the increase in energy and freight prices generated a negative impact of US$5 billion on Argentina’s trade balance.


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