IMF confirms Argentina has requested new $20-B loan program

A sign outside a store reads in Spanish “We accept dollars” in Buenos Aires, Argentina, December 12, 2023. REUTERS/Tomas Cuesta/File Photo

WASHINGTON, United States — The International Monetary Fund on Friday confirmed it was in talks with Argentina about a new $20 billion, four-year loan program to support the country’s economic reform program.

“Progress on the new program is very advanced and engagement continues at all levels to finalize an agreement that will help Argentina consolidate its already successful economic program,” an IMF spokesperson said in a statement shared with AFP, adding that any deal would need to be confirmed by the Fund’s executive board.

President Javier Milei’s government had already announced on Thursday that Argentina — the IMF’s biggest debtor by far — was seeking a $20 billion loan on top of the $44 billion it already owes the IMF.

READ: IMF, Argentina in advanced talks over new loan program

The previous loan, signed in 2018, was the biggest ever by the Washington-based lender of last resort to Argentina, a serial defaulter.

In all, the IMF has bailed out South America’s second-biggest economy 22 times.

The new program has yet to be approved by the Fund’s board.

Argentine Economy Minister Luis Caputo said the new money would be used to recapitalize the country’s central bank.

He added that Argentina was also negotiating loans with the World Bank and Inter-American Development Bank.

Milei said Thursday that the loans would increase the central bank’s reserves to “at least” $50 billion, compared to $26.23 billion at present.

The prospect of another IMF loan has caused a run on the peso, prompted by fears that the new deal could entail a possible devaluation which Milei has rebuffed.