Buenos Aires, Aug. 24, 2023: The International Monetary Fund (IMF) has released a loan tranche of $7.5 billion for Argentina, in a deal that took four months to negotiate.
The IMF Executive Board announced the deal in Washington on Wednesday.
“The IMF Executive Board completed today the fifth and six reviews of Argentina’s 30-month Extended Fund Facility (EFF).
“The Board’s decision enables an immediate disbursement of around 7.5 billion dollars,’’ the IMF said in a statement published on Wednesday.
Due to an extreme drought and political mistakes, Argentina had failed to make the agreed budget adjustments, the fund said.
However, it was possible to agree on new goals such as increasing the reserves of the central bank and more fiscal discipline.
The Ministry of Economy in Buenos Aires has to pass on more than half of the newly disbursed funds to other creditors, the newspaper “La Nación’’ reported.
In order to meet its interest obligations to the fund, Argentina had recently taken out several bridging loans in Qatar, China and from the Latin American development bank CAF.
The second largest economy in South America is mired in a severe economic and financial crisis.
Argentina suffered from a bloated state apparatus, low productivity in industry and a large shadow economy that deprived the state of much tax revenue.
The national currency, the peso, continued to depreciate against the U.S. dollar, and the mountain of debt was constantly growing.
The inflation rate is soaring at 115 per cent.