IMF announces preliminary deal for $20 bln Argentina loan

WASHINGTON

A sign with exchange rates is pictured on a gift shop in Buenos Aires on April 7, 2025.

The International Monetary Fund has announced it had reached a preliminary agreement with Argentina on a $20 billion four-year loan arrangement to support a "comprehensive economic program."

The multilateral lender said it had reached a staff-level agreement on the program that was subject to approval by its executive board, which is expected to consider the proposal "in the coming days."

"The agreement builds on the authorities' impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators," said an IMF statement.

President Javier Milei's government had earlier announced that Argentina, the IMF's biggest debtor by far, was in talks over the new loan, which comes on top of the $44 billion it already owes.

The country's 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.

Economy Minister Luis Caputo said last month that the new money would be used to recapitalize the country's central bank.

Milei said that the loans would increase the central bank's reserves to "at least" $50 billion, compared to $26.23 billion at present.

Self-described "anarcho-capitalist" Milei came to office in December 2023 pledging to cut spending, tame inflation and fix a steep fiscal deficit.

In the last six months, the peso has fallen about ten percent to the US dollar.

Argentina has one of the highest inflation rates in the world, but under Milei it has fallen from 211 percent year-on-year at the end of 2023 to 84.5 percent in January.