Argentina’s government is “exploring options” for a new financing programme with the International Monetary Fund, Luis Cubeddu, the Fund’s deputy director for Latin America and the Caribbean, confirmed on Friday.
Talks are "taking place within the context of the current Extended Fund Facility" programme, he added, referring to the US$44-billion loan Argentina has with the multilateral lender.
The authorities "are exploring options to move to a new programme," said Cubeddu at a press conference, adding that he hopes to "provide a bit more information on this in terms of the engagement strategy in the coming weeks."
Discussions "have deepened in an effort to better and fully understand their plans for the period ahead," said the Venezuelan economist.
President Javier Milei’s government is seeking fresh funds from the IMF to bolster Argentina’s Central Bank’s 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.
According to Cubeddu, "the need to gradually dismantle some of the existing restrictions and controls" is being addressed, but "this must be done in a carefully calibrated manner."
On Thursday, IMF Managing Director Kristalina Georgieva met with Argentina’s Economy Minister Luis Caputo and Central Bank Governor Santiago Bausili.
"We emphasised the significant progress that has been made, particularly in reducing inflation and establishing a very strong fiscal anchor," said Cubeddu, who took over negotiations with the country in September, succeeding Rodrigo Valdés, the IMF director for the region, who was previously criticised by Milei.
"We now have nine months of primary surpluses and overall balances in our favour," which "has allowed for an improvement in the Central Bank's balance sheet, as well as a strengthening of international reserves from extremely low levels," he added.
Talks also emphasised that "challenges persist" and that maintaining the achievements made "will require policies to evolve and appropriately balance internal and external considerations,” said the official.
Caputo confirmed Thursday that Argentina will seek “fresh funds” from the IMF in a new deal. However, the official warned that an agreement is far from imminent and that negotiations are part of a “long process.”
In a message on the X social network on Thursday, Georgieva applauded Argentina’s “progress in stabilising the economy.”
“Very good conversation with [Economy] Minister Luis Caputo today. Welcomed Argentina's progress in stabilising its economy while supporting those most in need. The IMF continues to work with [Argentina] on a path to a more prosperous economy for all Argentines,” wrote the IMF chief.
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/AFP
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