The International Monetary Fund said Friday that it reached an agreement with Argentina that would open the door for the cash-strapped South American country to receive $7.5 billion over the next few months as part of an existing program, the Associated Press reported. The agreement, which was under negotiations for weeks, still needs approval from the IMF Executive Board, which is scheduled to meet in the second half of August, the international financial organization said in a news release.
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The International Monetary Fund expects to conclude a review of its $44 billion financing program to Argentina in the coming days, potentially giving the South American nation a lifeline to keep its economy afloat until a new president takes office in December, Reuters reported. The IMF said on Sunday it had reached “understandings” on goals and parameters underlying a staff-level agreement that will eventually be submitted to its board for approval.
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Argentina President Alberto Fernandez warned against a sharp devaluation of the country’s currency as expectations mount that his soon-to-be-elected successor will have no other choice to address a chronic dollar shortage, Bloomberg reported. “An abrupt devaluation would be a problem for Argentina,” Fernandez said during an interview with Bloomberg TV’s Maria Tadeo in Brussels, where he is attending a summit of leaders from Latin America and Europe. He made no mention that a currency move he characterized as “very damaging” was imminent.
Argentines are tightening their wallets to make end meets as the South American country battles inflation which could surpass 140% on an annual basis this year, hunting for the cheapest prices on basic goods to shield their income, Reuters reported. The national statistics office INDEC is set to release the country's June inflation figure later on Thursday. Analysts polled by Reuters expect the rate of rising prices to slow to 7.0% in June from 7.8% the previous month.
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Argentina's monthly inflation rate is expected to slow to 7.0% in June, according to the median forecast in a Reuters poll, after hitting 7.8% in May, as the government battles to control spiraling prices ahead of elections in October, Reuters reported. The poll of 23 analysts measures inflation by the Consumer Price Index (CPI), with estimates ranging from 6.6% to 7.8%.
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Argentina’s central bank expects to hold its benchmark interest rate at 97% through the August primary elections as officials estimate monthly inflation slowed in June, according to two people with direct knowledge of the matter, Bloomberg News reported. Central bank officials expect monthly price increases slowed to less than 7% last month, justifying the rate hike pause, according to the people, who asked not to be named to discuss upcoming policy decisions.
The International Monetary Fund said on Friday that Argentina is current in its payment obligations, and the government said it made a $2.7 billion payment to the fund using its existing stock of the IMF's reserve assets, and Chinese currency, Reuters reported. Argentina's economy ministry said through a spokesman the June payments were made "without using dollars" but the country's holdings of the fund's special-drawing rights (SDRs) and Chinese yuan. The operation, which depleted Argentina's $1.6 billion in SDRs, underscores how desperate the country's dollar position has become.
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Argentina will make scheduled payments totaling some $1.9 billion to the International Monetary Fund (IMF) on Wednesday, an economy ministry source said, Reuters reported. The South American country is in talks with the IMF to revamp its $44 billion loan program with the lender as it battles with dwindling foreign currency reserves, a weak peso currency and annual inflation over 100%. Argentina has $2.7 billion due to the fund this month alone.
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Argentina and the International Monetary Fund (IMF) have a $44 billion dilemma, with the two sides set to meet for crunch talks to revamp the country's huge, wobbling debt deal, key to avoiding default on billions in looming debt payments, Reuters reported. The South American country, a serial defaulter that has struggled for years with inflation and currency crises, struck a $57 billion loan deal with the IMF in 2018, which failed and was replaced last year with a new $44 billion program.
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Argentina's annual inflation rate topped 114% in May, but in a silver lining for the embattled South American country the monthly rise came in well below analyst forecasts and posted a surprise slowdown versus a peak the month before, Reuters reported. The monthly rise in the consumer price index (CPI) clocked in at 7.8%, the country's statistics agency said on Wednesday, well below analyst estimates of an 8.9% increase and under the 8.4% posted in April, the largest monthly rise in decades.
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