BUENOS AIRES (Reuters) -The executive board of the International Monetary Fund (IMF) approved the second review for Argentina’s $44 billion extended fund facility program, the lender said on Friday, noting the country’s efforts to meet the established targets.
The approval allows for the issuance of $3.8 billion, bringing total disbursements under the arrangement to about $17.5 billion.
“Decisive actions by the new economic team have been critical to stabilizing markets and rebuilding confidence,” the IMF said in a statement.
Argentina, a major grains producer, struck a new IMF deal earlier this year to replace a failed program from 2018.
The new program came with economic targets, including rebuilding depleted international reserves and reducing a deep primary fiscal deficit to improve the country’s finances.
“Relevant end-September quantitative program targets were met, including for net international reserves and monetary financing of the fiscal deficit,” the IMF said.
Its managing director, Kristalina Georgieva, added that the decision comes after Argentina’s new economic team, named in July, had adopted “decisive corrective measures” that were starting “to restore confidence and policy credibility.”
The South American country is still struggling with a high annual inflation rate, with forecasts that it will top 100% this year. But compliance with the agreed fiscal and monetary policies will allow Argentina to gradually reduce inflation, an IMF source said, speaking on condition of anonymity.
“Through the implementation of lasting fiscal and monetary measures, the (exchange rate) gap and inflation can be reduced little by little,” the source said, noting that the process would “take time.”