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ECONOMY | 17-07-2023 17:18

Argentina expects to reach IMF staff-level agreement Friday

Officials expect to close a staff-level agreement with the International Monetary Fund by Friday after months of negotiations over the US$44-billion programme.

Argentine officials expect to close a staff-level agreement with the International Monetary Fund by Friday after months of negotiations over the US$44-billion programme, according to two Economy Ministry officials who asked not to be named discussing ongoing talks.

Economy Minister Sergio Massa spoke to IMF Managing Director Kristalina Georgieva on Sunday, according to one of the officials. Argentina would send a delegation to Washington on Monday night to accelerate talks, the officials added, though a trip has been teased several times in recent weeks by ministry staff, only to be pushed back. 

Some Argentine staff members still haven’t been told if they’re flying Monday, according to a person with direct knowledge. Massa pledged three weeks ago that a deal would become public in “hours.” 

The government owes the IMF about US$2.6 billion by the end of July or risks running into arrears. The Central Bank scraped together a similar-sized payment in June by using its IMF special drawing rights and Chinese yuan from a currency swap line with Beijing. 

Massa is seeking to overhaul the country’s IMF programme as a record drought and “policy setbacks” pushed the programme off track. At the same time, talks have stalled for political reasons because Massa is now the ruling party’s presidential candidate, putting this particular round of negotiations in election crosshairs. 

Massa and his team are seeking to receive more cash up front from the IMF as a result of the drought that destroyed US$20 billion of agriculture exports. They’re also pushing the IMF to let Argentina use some of the money to intervene in the country’s exchange rates, an economic policy that the IMF has warned against in the past. 

An IMF spokesperson didn’t provide a comment during weekend hours Sunday. Chief IMF spokeswoman Julie Kozack on Thursday declined to provide details of talks at a press conference last week, noting both sides were working “intensely.”

Argentines will cast ballots in the primary on August 13 and then vote in the general election on October 22. 

by Patrick Gillespie, Bloomberg

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