IMF and Argentina set ground for Staff Level Agreement on $45 billion, Macri-era debt

[peppertree]

The International Monetary Fund (IMF) announced on Sunday midday that it has agreed on primary objectives for a new Staff-Level Agreement with Argentina.

“The main objectives and parameters that will serve as the grounds for a ‘Staff-Level Agreement’ have been agreed on,” the IMF announced via Twitter.

Argentina and the IMF agreed on a disbursement program for the second semester of 2023 - including a potential advance of over $8 billion.

Government sources told the Herald they expect the staff level agreement — a preliminary technical understanding subject to the IMF board’s approval — to be closed between Wednesday and Thursday.

The agreement would allow the country to continue servicing its $45 billion IMF debt, granted to former President Mauricio Macri during his failed, 2019 re-election campaign - reportedly at then-President Donald Trump's insistence.

The deal recognizes the harsh impact a record drought has had on the country’s exports and fiscal income, with agricultural GDP down 43.8% in May from a year earlier (and 5.5% overall).

Amid the worst drought in a century, Argentina's central bank reserves have so far this year plummeted by $19 billion, to $25.5 billion - less than three months of goods and services imports.

Argentine officials also credited White House and congressional support for today's agreement, while noting that IMF officials had disclosed that right-wing Argentine figures lobbied hard against any agreement - preferring instead "to let it all blow up" ahead of elections this October.

At: https://buenosairesherald.com/economics/imf-and-argentina-set-the-ground-for-staff-level-agreement

Argentine Economy Minister Sergio Massa and IMF Deputy Managing Director Gita Gopinath share a light moment during Massa's March visit to IMF headquarters - when the last IMF loan disbursement to the country was agreed on.

The IMF's quarterly loan disbursements to Argentina - the centerpiece of a March 2022 refinance agreement - have been critical to Argentina's repayment of a $45 billion IMF debt, granted to former President Mauricio Macri during his failed, 2019 re-election campaign - reportedly at then-President Donald Trump's insistence

A record drought this year - estimated to have cost Argentina some $20 billion in export earnings - led to a renegotiation of the 2022 refinance agreement.

[Judi Lynn]

1. Beautiful news to see the first day of the week. Wow! A shot in the arm for the people

is simultaneously a kick in the tush for the hard-bitten, vicious fascists of Argentina who were depending upon using the product of their machinations to win the next election for them.

Thank goodness for Economy Minister Sergio Massa, and the wisdom of Alberto Fernández, himself no slouch, as he worked hard with Argentina's former President Néstor Kirchner, as he pulled the economy out of a deep ditch after being completely disabled and totally trashed just prior!

It's exactly predictable the Macri Dirty War dictatorship crowd has been active trying to prevent this huge step. Their evil never sleeps! I hope they will be able to watch their own scheme blow up, instead!

So very, very happy to see this information today.

Thank you, peppertree.

[peppertree]

3. You're welcome, Judi. Everyone involved certainly worked hard on this.

Special mention should go, I understand, to Deputy Economy Minister Gabriel Rubinstein - a pragmatic centrist whom the Clarín Group tried to provoke into not accepting the post last year.

Why? Precisely - because they knew he's talented, and would be an effective 'storm pilot' (as Massa and the underappreciated Fernández have been).



Going forward? We can only hope for the best - as always with Argentina.

Thanks again, and have a great week Judi. Stay cool!

[Judi Lynn]

2. Only late last week we read this:Argentina's Cabinet Chief Says Harvest Should Bring Economic Relief

Argentina's Cabinet Chief Says Harvest Should Bring Economic Relief

By Reuters
|
July 21, 2023, at 5:03 p.m.

By Nicolás Misculin

BUENOS AIRES (Reuters) - Argentina's financial crisis, which has been marked by exchange rate volatility and soaring inflation, should start abating in November and December, with large foreign currency inflows from the wheat harvest, cabinet chief Agustin Rossi told Reuters on Friday.

Argentina's prolonged financial crisis has been aggravated by a ferocious drought that reduced crucial agricultural exports by an estimated $20 billion this year.

"This situation ends in November, December of this year," Rossi, who is also a vice-presidential candidate in October elections, told Reuters from his office at the Casa Rosada presidential palace in Buenos Aires.

"Next year you will not have a drought, you will have savings of $4 billion because you will have the first stage of the Nestor Kirchner gas pipeline (which will transport natural gas from the Vaca Muerta shale formation) in operation," Rossi said.

"This will lead to a favorable trade balance and recover reserves, and imply a more controlled exchange rate. This immediately lowers inflation and recovers the purchasing power of wages."

More:
https://www.usnews.com/news/world/articles/2023-07-21/argentinas-cabinet-chief-says-harvest-should-bring-economic-relief

(I remember feeling discouraged, thinking it might arrive so late the government could be back in the filthy hands of the fascists agaian!)