IMF in talks with Argentina on loan to succeed US$44-billion deal

Argentina is seeking a new programme with the International Monetary Fund to succeed its current US$44-billion deal, a step forward in resolving one of the Washington lender’s most problematic agreements.

Chief IMF Spokeswoman Julie Kozack confirmed Thursday that President Javier Milei’s government is working toward a new programme instead of finishing the final reviews of the deal the libertarian inherited from his predecessor. 

“The authorities have formally expressed interest in moving to a new programme and negotiations are now underway,” Kozack said Thursday at a press conference in Washington. 

Talks between Argentina and the IMF gained momentum after a team of officials from Economy Minister Luis Caputo’s office and the Central Bank travelled to Washington earlier this month to meet with the Fund’s representatives.  

A central question in negotiations on Argentina’s next IMF programme is whether the lender will provide Milei with additional financing beyond rolling over the US$44-billion burden — and how much. The libertarian president floated US$15 billion earlier this year but hasn’t referenced the figure recently. Caputo said this week that he anticipates fresh funds to be part of the programme. 

When agreed, this would mark the country’s 23rd programme with the organisation since 1958 and its third since just 2018. The IMF has a poor track record in Argentina after several agreements over the decades failed to turn around the economy as one government after another often flouted programme targets while spending the global lender’s money.

Milei and Caputo, his top negotiator, have a mixed relationship with the IMF. The President lambasted one of the Fund’s top officials earlier this year, Rodrigo Valdés, who ultimately chose to step away from negotiations. During the first deal in 2018, Caputo disagreed with IMF officials over currency policy and resigned after a short tenure as Central Bank chief following a stretch as Argentina’s finance minister at the time. 

IMF leadership, meanwhile, has lauded Milei and Caputo this year for cutting spending, cooling inflation and collapsing a gap between the country’s many exchange rates. Milei’s government has largely met the key targets in its current programme after the previous administration missed several.