The International Monetary Fund’s executive board met this week to discuss a new Argentina programme during an informal session in Washington, according to people familiar with the matter.
A central topic of discussion at the Wednesday meeting was how much of the US$20-billion programme would be disbursed immediately, the people said, asking not to be named because the discussions are private.
There is still no consensus among board members on the size of the upfront payment, the people added, without referring to a specific amount under discussion.
The IMF press office declined to comment, but flagged previous remarks by Managing Director Kristalina Georgieva this week on early disbursements. Argentina’s Economy Ministry didn’t immediately respond to text messages or a phone call.
Georgieva said March 31 that it was “reasonable” for the country to ask the IMF to disburse 40 percent of the new loan in a first payment. “They’ve earned it, given their performance,” she told Reuters.
Board members previously discussed Argentina’s programme during an informal meeting on March 25. These meetings are key steps toward a staff-level agreement for the loan, which later would need to be formally approved by the IMF board.
Giving Argentina more money sooner, a practice known as frontloading, is a contentious issue because any financing for the country before its next capital payment to the IMF would be considered fresh funds, increasing the lender’s exposure to Argentina.
The crisis-prone nation now led by libertarian President Javier Milei needs to repay more than US$40 billion from its previous 2022 programme, with the next required capital payment due in September next year.
Argentina is looking for a large portion of the new loan to be paid out immediately, Bloomberg News reported last week after Economy Minister Luis Caputo announced the amount of its next IMF programme would be US$20 billion.
IMF loans usually are disbursed gradually over a few years, with countries needing to meet certain benchmarks over time.
Milei and Caputo travelled to Florida this week to attend an event at Mar-a-Lago, hoping to rally US political support for Argentina’s request. Milei told local media prior to the trip that he could meet informally with President Donald Trump, but the Argentine leader left for home without seeing his US counterpart.
by Jorgelina do Rosario & Eric Martin, Bloomberg
Comments