He International Monetary Fund (IMF) applauds the measures taken by Argentinawhich devalued the peso and raised benchmark interest rates, and plans to disburse funds to the country on August 23, according to a statement released on Monday.
In 2022, the IMF and the Argentine government agreed on a credit program under which the South American country receives US$44 billion over 30 months in exchange for the central bank increasing its international reserves and the government reducing the fiscal deficit of 3% of Gross Domestic Product in 2021 to 2.5% in 2022, 1.9% in 2023 and 0.9% in 2024.
In July, the Fund’s technical staff reached an agreement with Buenos Aires on the fifth and sixth revision of this package, which paves the way for the disbursement of US$7.5 billion, but is subject to board approval.
“It is expected that (the board of directors) will meet on August 23 to approve the agreed disbursements,” informed this Monday Julie Kozack, director of communications of the IMF, quoted in the statement.
In July, the Argentine Economy Minister, Sergio Massa, also a candidate for the country’s presidency for the center-left Peronist coalition, stated that the disbursements would be made in two periods: one the third week of August and the other the first of November.
One of the IMF’s priorities is for Argentina to meet the goals of the agreement, something that it is barely achieving in a context of 40% of poverty with part of the population depending on state aid.
For the IMF, the latest measures of the government of Alberto Fernández go in the right direction.
“We value the recent policy actions of the authorities and the commitment to safeguard stability, rebuild reserves and strengthen fiscal order”Kozack added.
The Central Bank of Argentina devalued around twenty% the peso against the dollar this Monday, one day after primary elections in which the opposition prevailed and the far-right liberal Javier Milei, a supporter of the dollarization of the economy, achieved a promising result for the October general elections (30% of the votes).
The coalitions against the Peronist government of Fernández advocate a devaluation of the peso, and together they had the support of almost the 60% of the votes.
The central raised the rates to the 118%, In a country that suffers from one of the highest inflation rates in the world, 115% annual.
Source: AFP
Source: Gestion
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