Argentina's Bold Move: Seeking Large IMF Disbursement in Monumental Program

Argentina is negotiating with the IMF for a sizable initial disbursement of over 40% under a $20-billion program. The country has reduced its fiscal deficit and cut public spending as part of efforts to increase central bank reserves and remove foreign exchange restrictions hindering business and investment.

Argentina is pushing for a significant first disbursement exceeding 40% from a $20-billion deal it is negotiating with the International Monetary Fund (IMF), according to Economy Minister Luis Caputo's announcement on Sunday.

In a bid to reinforce central bank reserves and ease foreign exchange restrictions perceived as detrimental to business and investment, Argentina has eradicated its fiscal deficit and slashed public expenditures. Caputo, speaking on television, emphasized the request for more substantial disbursements, notably higher than the traditional 20% to 30% benchmarks, stating, 'We've already done everything.'

The IMF's board of directors still needs to approve the proposed four-year arrangement, following the previous $44-billion program signed in 2018, as confirmed by both the Argentine government and the IMF last week.

(With inputs from agencies.)