The International Monetary Fund said on Friday that it has reached a staff-level agreement with Argentina to unlock about $7.5 billion and complete the fifth and sixth reviews of the struggling country’s $44 billion loan program.
The agreement, which still needs IMF Executive Board approval, eases some program requirements because a devastating drought has created a “very challenging” economic environment in Argentina, causing some end-June financial targets to be missed.
Reuters first reported that the agreement would combine the fifth and sixth reviews of Argentina’s IMF program — a move that provides additional loan funds sooner. The IMF said its board would meet to consider the agreement in the second half of August.
The Fund said in a statement that since the fourth review of the loan program in March, Argentina’s economic situation has become very challenging due to the larger-than-anticipated impact of a drought, which had a significant impact on exports and fiscal revenues.”
“There have also been policy slippages and delays, which have contributed to strong domestic demand and a weaker trade balance,” the IMF added.