IMF says ‘further discussions needed’ on Argentina loan deal

IMF staff advanced work on a loan program for Argentina in talks with officials this week, but on Friday said “further discussions are needed” before the aid package can be approved.

The crisis-ravaged South American nation needs a new loan to enable it to pay off the $44 billion debt to the International Monetary Fund.

The crisis lender noted the “stronger-than-expected rebound” in the country but said the officials recognize “the need to gradually and sustainably improve public finances,” including with “policies to build international reserves,” and tackle “persistent high inflation,” the IMF said in a statement.

But “the IMF team and the Argentine authorities remain fully committed to their collective work on a framework and policies for an IMF-supported program.”

Officials from Argentina’s economy ministry and central bank arrived in Washington Saturday for talks, and the government indicated it expected to finalize a deal soon.

Argentina has received $44 billion of a $57 billion IMF loan arranged under former president Mauricio Macri, with the last installment in July 2019.

After taking office, his successor Alberto Fernandez refused to accept the rest of the loan.

Argentina, the IMF’s biggest debtor, has been in recession since 2018 and is seeking to renegotiate the loan. Discussions have been underway since June 2020.

So far this year, Argentina has made a $1.9 billion payment to the fund, and paid $1.3 billion in interest.

The government has said it will make a further $1.8 billion payment by December 18.

If no agreement is reached, Argentina would have to pay the rest to the fund in installments through 2024, with the lion’s share to be reimbursed in 2022 and 2023.