Mauricio Macri’s Government must guarantee that with the new disbursement in favor of Argentina for USD 5.4 billion that the International Monetary Fund (IMF) will sign this Friday will comply with all the deadlines agreed for this year. This new disbursement is given after the approval of the quarterly goals to March by the technical staff of the fund.
The release of the check, which now reaches 78% of the disbursement agreed last year, had been announced on Monday by the new director in charge of the agency, David Lipton who, through a statement, had been pleased to announce that the technical staff of the IMF and the Argentine authorities reached an agreement on the fourth review of the economic program supported by the stand-by agreement. Subject to the approval of the executive board, Argentina would have access to US $ 5.4 billion.
The great novelty is that, in the meeting of the IMF board, Lipton will have to review the details of how the agreement with Argentina has evolved. The executive is a democrat economist who had been acting as the second of Christine Lagarde, who left her position to become the head of the European Central Bank. Lipton has praised the Argentine Government for its continued efforts and the firm implementation of its economic policy program. Lipton stated that the authorities completed all their fiscal, monetary and social expenditure objectives within the framework of the IMF-supported program in the context of this review.
The USD 5,400 million are added to the loan granted by the agency a year ago for a total of USD 57,000 million. There are still three more shipments to close the stand by. The IMF had already released the first disbursement of the year last April, authorizing the turnaround of some USD 10.8 billion. With the disbursement agreed for next week, the IMF will have already sent the country since June of last year, some USD 44,600 million. Subtract to complete the agreement about USD 12.7 billion that, if approved future revisions, would enter before the end of the year, completing USD 57.3 billion of the total stand by.
It will be the task of the future Government to renegotiate, or not, the agreement signed last June (extended and modified in September 2018), to eventually get another USD 10,000 million and close all 2020.
A mission of the Fund headed by Roberto Cardarelli visited Argentina on May to carry out discussions on the fourth revision of the program supported by the IMF. Last Friday, Lipton said: I fully support Argentina's efforts to strengthen confidence, lay the foundations for sustainable growth and protect the most vulnerable, and I look forward to discussing this review with the IMF Executive Board on July 12.
In September the fifth revision will have to pass and a month later, just before the Presidential elections, the new check would arrive from Washington, for another USD 5.4 billion. By that time, the Fund will have already loaned 88% of the total.
It is key that the country risk continues to fall and that Argentina recover access to financial markets. The new government that will assume in December, whatever its color, will have to go out to finance itself in the markets for a figure close to USD 15,000 million, in addition to the refinancing of Letes in both pesos and dollars.