Argentina and the IMF would have reached an agreement to reformulate the reserve accumulation goals, within the current agreement. Consequently, the agency’s technical staff would recommend to the Board of Directors the approval of the modification to the current program.
This was reported from official sources, which suggest that in the next few hours the agency will release the details with the guidelines that Argentina must comply with. The delay in finalizing the figures began to corner negotiators because Argentina must pay the IMF US$2.7 billion next week, according to the guidelines of the original pact.
The IMF technical staff and the Argentine authorities 🇦🇷 reach an agreement at the technical staff level on the fourth review under the Expanded Fund Facility agreement. https://t.co/kXymItIxdA pic.twitter.com/ZjmPDcKDts
– IMF (@FMInoticias) March 13, 2023
Now the technical staff will send the text to the Board, which will have to give the final approval before next Monday to enable a disbursement of US$5.2 billion. Argentina was supposed to add some US$3.7 billion during the first quarter of the year, but the drought and the boomerang that resulted from the soybean dollar plans had a negative impact.
So far, instead of adding foreign currency, the Central Bank adds a net outflow of about US$3.5 billion and there are no possibilities of reversal.
The soybean dollar absorbed in December what could accumulate in January and February, and consequently the worst warnings about the effects of the plan came true. In addition, the drought deepened the lack of exportable products, deepening the financial slump.
Although the IMF would have given the go-ahead with the issue of reserves, it will be important to determine other key variables, such as the fiscal deficit target.