Argentina and IMF agree to reformulate current financial program

The Government of Argentina and the International Monetary Fund (IMF) agreed today, Saturday, on a reformulation of the financial program that both parties have maintained since March of last year, given the impact of the drought on the South American country’s international reserves.

The decision to “recalibrate” the goals contained in the Extended Facilities Agreement (EFF) resulted from a meeting held in Washington, United States, between the Argentine Minister of Economy, Sergio Massa, and the IMF Deputy Managing Director, Gita Gopinath, according to the state news agency “Télam”.

“In the meeting, Gopinath and Massa agreed on the seriousness of the historic drought and, therefore, agreed on the need to ‘reformulate’ the program”, the official agency indicated.

The head of the economic portfolio referred in the morning hours to the meeting held with the representative of the multilateral organization, describing it as “very productive”.

“We had a very productive meeting with IMF Deputy Managing Director Gita Gopinath, with whom we discussed the impact of the worst drought in Argentina’s history, and we committed to continue working together to strengthen the program in the face of this difficult scenario,” Massa said through his Twitter account.

Regarding the changes in the economic goals contemplated in the EFF that are being evaluated between the parties, “all alternatives are on the table”, added the official information.

After the meeting with Gopinath, Massa held a meeting with the Managing Director of the IMF, Kristalina Georgieva, within the framework of the organization’s spring meeting.

The reformulation of the current financial program between Argentina and the IMF comes after the South American country met all the quantitative targets in the first year of the agreement.

The initial goals of the agreement include a reduction of the fiscal deficit to 1.9 percent of Gross Domestic Product (GDP) by 2023 and a gradual reduction of the Central Bank’s assistance to the Argentine Treasury to achieve convergence (zero) by 2024.

Last April 4, both parties agreed on a modification of the international reserves target as a consequence of the adverse effects left by the drought.

Argentina and the IMF maintain a financial program to resolve commitments for US$44.5 billion, an amount acquired by the South American country as of mid-2018 in a context of high exchange rate volatility and financial crisis.