Argentina ‘sure’ of new IMF deal, says it doesn’t depend on Trump

Argentina’s government boldly predicted Thursday that the nation will reach a new agreement with the International Monetary Fund to replace its existing US$44-billion loan programme, with or without the support of US president-elect Donald Trump.

“There is sure to be a new agreement [with the IMF] and we understand that the path is lined up and paved for this to happen as quickly as possible. There will be no inconvenience,” said Presidential Spokesman Manuel Adorni at a press conference.

Adorni even went on to suggest that Trump’s potential support for a new deal would not be decisive, stating that support would come from “all countries because Argentina's plan is consistent.”

“There is no reason not to support an agreement with the IMF. That support should be from all countries because the plan is consistent and sustainable over time. Whether with additional funds or not,” stressed President Javier Milei’s top spokesman

Milei’s government is seeking fresh funds from the IMF to bolster Central Bank reserves and facilitate the lifting of the currency controls, known locally as the ‘cepo.’

Capital controls which have been in place since 2019 and restrict access to dollars in a country where the US dollar serves as a safe haven for savings.

Last month, a top IMF official said that negotiations over a new deal to replace its existing US$44-billion loan were "taking place within the context of Argentina’s current Extended Fund Facility" programme.

However, IMF Spokesperson Julie Kozack said during a press briefing on Thursday that authorities in Argentina “are exploring the option of moving to a new arrangement.”

Stating that officials are “currently exploring the option of moving to a new arrangement with the IMF,” Kozack said Milei’s government should continue with its monetary stabilisation, which is “yielding incredible results.”

Kozack noted in particular the reduction in inflation, fiscal surpluses and improving Central Bank reserves.

Retaining an optimistic tone over what lies ahead, the IMF official highlighted “signs of a recovery in both economic activity and real wages.”

Kozack said the Fund is ready “to support Argentina and its people in consolidating the gains achieved so far and in addressing the challenges that remain,” repeating recent positive rhetoric from IMF staff on the performance of Milei’s government.

Regarding the country's quarterly reviews, which are part of its current programme, Kozack noted that “the executive board completed the eighth review of Argentina's programme on June 8” this year allowing for a disbursement of US$41.4 billion in funds.

Kozack was also asked about Argentina’s exchange rate and currency controls, which Milei has said will be removed when the time is right.

“To the question about exchange rate restrictions, what I can say is that the stabilisation programme, I repeat, has yielded better than expected results,” said the spokesperson. 

“To maintain the sustainability of these impressive results, in terms of stability and growth … it is of decisive importance to continue to adopt a coherent set of policies,” she concluded.

The International Monetary Fund forecasts further recession for Argentina’s economy this year, with GDP set to contract 3.5 percent this year, before bouncing back with five percent growth in 2025.

– TIMES/PERFIL/NA