Argentina may combine final two IMF reviews before new talks

Argentina’s government may condense negotiations with International Monetary Fund staff on its US$44-billion programme before opening talks on a new agreement that could include new money, Economy Minister Luis Caputo told investors Tuesday in New York, according to people with direct knowledge.

The country could combine the final two staff-level reviews of the current programme into one, then proceed with negotiations for a new programme that would take about three to six months, Caputo said, according to people with knowledge of his closed-door presentation at JPMorgan Chase & Co’s offices. The minister didn’t specify how much additional money he would seek from the IMF.

In a response to Bloomberg News, Caputo said he didn’t estimate any time line for talks.

“There isn’t any time frame estimate, nor have we defined yet if we will request a new agreement,” Caputo responded.

The IMF referred to comments by chief spokesperson Julie Kozack earlier this month at a press conference about ongoing technical discussions between IMF staff and Argentine officials.

Although Caputo announced months ago Argentina would seek a new programme, talks haven’t advanced after President Javier Milei criticised the policy views of IMF Western Hemisphere Director Rodrigo Valdés. The IMF announced earlier this month that Valdés chose to step away from the Argentina programme and delegate negotiations to his deputies.

Although Argentina’s past government combined IMF reviews when it was behind schedule, it’s unclear if IMF rules permit a government to move forward a review. Argentina’s final two reviews of the current programme were scheduled for August and November, according to the last staff report from June.

The government has met its fiscal and monetary targets within the IMF programme, an improvement from the previous administration that missed all of its benchmarks. However, the Central Bank still struggles to build up its foreign reserves that are crucial to lifting currency controls at some point and returning to international markets. Argentina’s net international reserves are at negative levels of around US$5 billion, according to private consulting firms.

Caputo also told investors Tuesday the government has already secured dollars for the interest payments on its global bonds in January, but is still studying different vehicles to be able to make principal payments due at the same time. He reiterated that the government does not plan to return to the market until January 2026.

Milei’s economy minister confirmed the government plans to slow the pace of its currency crawling peg from the current two-percent pace as monthly inflation continues to ease too. Earlier this year, Milei said he would slow the peg to one-percent a month once certain inflation metrics reached two percent. Although the peg has brought down Argentina’s real exchange rate, Caputo said Tuesday he’s not worried about its level.