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September 23rd, 2021

Imf Argentina Standby Agreement

IMF Managing Director Christine Lagarde made the following statement on the staff-level deal: BUENOS AIRES (Reuters) – The Executive Board of the International Monetary Fund said on Friday it would deliver $5.4 billion in cash to Argentina after approving a fourth revision of a standby loan agreement with the crisis-s-hit South American country. “The unwavering implementation of the policy behind the IMF-supported program will be critical to further progress. As macroeconomic stability becomes increasingly consolidated, political efforts need to focus more on reviving structural reform plans. The recent Mercosur-EU trade agreement is an important step in this direction. Further efforts are needed to reorganize the tax system; strengthen competition in domestic product markets; and to intensify efforts to strengthen governance and fight corruption. These reforms have considerable potential to increase Argentina`s growth potential, create jobs, reduce poverty and improve the standard of living of all Argentines. The latest tranche is part of a $57 billion IMF financing deal passed last year, which included unpopular spending cuts that hit households and businesses already facing recession and high inflation. International Monetary Fund staff and the Argentine authorities have reached agreement on a series of enhanced economic policies that will underpin the 36-month stand by agreement (SBA) approved on 20 June 2018. Subject to approval by the IMF Executive Board, the revised agreement charges IMF financing, increases available resources by $19 billion by the end of 2019, and brings the total amount available under the program to $57.1 billion by 2021.

The resources available under the program would no longer be treated as a precautionary measure and the authorities intend to use IMF funds for budget support. The new money could help disputed President Mauricio Macri reassure markets and boost investor confidence ahead of the first round of October`s presidential election, in which Macri aspires to a second term. The Board`s decision allows the authorities to make an immediate purchase of $15 billion (SDR 10.614 billion, or 333 percent of Argentina`s quota). . . .

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