The International Monetary Fund’s executive board is set to review Argentina’s current US$44-billion aid programme next month, according to people familiar with the matter, a crucial step as President Javier Milei negotiates for a new loan.
The board is tentatively set to meet in early January to evaluate a staff report on the agreement Argentina struck with the IMF in 2022, said the people, who spoke on the condition of anonymity as the details haven’t been made public.
The so-called ex-post evaluation assesses the programme’s design and implementation, and is a standard practice for countries with so-called exceptional access loans, which is when the fund lends to a country above its normal borrowing limits.
Such large loans were recently criticised by the IMF’s internal watchdog for shortcomings in both design and implementation, including a lack of consistency as well as clarity of expectations and benchmarks.
The IMF said in an emailed response to questions that a staff team is finalising the report, which it described as “standard and routine procedure for all IMF programmes involving lending above normal borrowing levels,” without commenting on the timing of the board’s review.
In the case of Argentina, the fund’s biggest debtor, the review is an important step required before the Milei administration can reach a new deal. Earlier this month, an IMF spokesperson said negotiations with Argentina are already underway. Officials from Milei’s government have said that it may include fresh funds.
Milei, who’s embarking on a major austerity plan that aims to turnaround Argentina’s troubled economy, has said a new programme would allow his government to lift currency controls next year.
Argentina has received US$41.4 billion under the current programme, its 22nd with the IMF since 1958. The remainder hasn’t been distributed because Argentina has moved to directly pursuing a new loan and skipping its final two reviews, which were scheduled for August and November.
The IMF last carried out a ex-post evaluation for Argentina in December 2021 when the board reviewed the 2018 loan, the largest stand-by arrangement in the fund’s history.
by Jorgelina do Rosario, Bloomberg
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