The International Monetary Fund is toughening its stance on Argentina’s multi-billion-dollar credit-line, with concerns growing in Washington over recent measures taken by Economy Minister Sergio Massa and the nation’s dwindling Central Bank reserves.
An exclusive report by the Reuters news agency this week said that executive directors on the multilateral lender’s board have expressed concerns over “how fast the country has been burning through international reserves since the latest programme review in August.”
Quoting three unnamed sources, who asked to remain anonymous, the article said that directors had discussed worries about Argentina’s record package and subsequently decided to sharpen its language to reflect as much.
With "depleted reserves and an overvalued currency, recent economic measures are not aligned with the programme," one of the sources is quoted as saying in the piece.
The fears were voiced at a board meeting on October 30 and the IMF has since toughened its rhetoric on Argentina’s economic management, reported Reuters journalist Jorgelina do Rosario.
Argentina is a recipient of IMF disbursements via its US$44.5-billion debt programme with the multilateral lender, some of which has been used to protect the value of the peso on foreign exchange markets.
Recent measures taken to boost pockets in the lead-up to the October 22 election and protect the strength of the currency have exacerbated inflation and prevented the accumulation of international reserves.
The sharpening of the agency's critical view of the agreement stems from the meeting held by the IMF's board of executive directors, which was not previously reported and consisted of an informal briefing on Argentina by the Fund's staff.
Following the meeting, the IMF used harsher language than previously deployed to criticise Argentina’s government, in particular the “mismanagement” of the economic programme.
Back in August, President Alberto Fernández’s government was granted a series of waivers after missing targets set out in the Fund’s quarterly review. The change in stance from the IMF could affect the next assessment, which is due to begin later this month and will determine if Argentina receives another tranche of funds from the multilateral lender.