(Special envoy to Washington).- The Directory of International Monetary Fund (IMF) approved on Wednesday the disbursement of US$7.5 billion for Argentina, a key decision at a time when the economic leadership aims to rebuild the Central Bank’s foreign currency reserves. The decision was made unanimouslyas far as he could find out Ambit.
“It is a very important step in the administration of the mortgage that (Mauricio) Macri left to Argentina”said the minister Sergio Massa after knowing the decision of the Board.
At the end of last July, the Argentine authorities and the IMF staff reached an agreement at the staff level on the fifth and sixth reviews. However, in the communiqué released by the IMF on that occasion, noted that the agreement was subject to implementation monitoring of agreed policy actions and approval by the Board of Executive Directors.
Now, after approval, it is anticipated that the next revision of the Argentine program take place in November.
The IMF considers that since the completion of the fourth review on March 31, Argentina’s economic situation has become very challenging. They evaluated that key program objectives through the end of June were not met due to the larger-than-expected impact of the drought, as well as policy deviations and delays.
For this reason is thatA policy package has been agreed with a sequential set of measures to rebuild reserves and improve fiscal sustainability, while protecting critical infrastructure and social spending.
Although both the Fund and the management of the Palacio de Hacienda agree that it is a priority for the country to accumulate reserves to pay the debt and sustain the level of activity, they differ regarding the instruments.
Mass in Washington
Minister Massa considers that devaluation “imposed” by the IMF is less effective than sectoral measuressuch as the differential dollar for grain exporters, in terms of reserve collection.
Massa maintained that “we have a debate with the Fund because we believe that the Country Tax was much more effective than the devaluation that they imposed on us and that it will aggravate inflation in August.”
Surely these issues will be the subject of conversation at the meeting that the minister will have this Wednesday with the head of the IMF, Kristalina Giorgieva.
Source: Ambito
