IMF Extends $50Bln Lifeline to Argentina

The International Monetary Fund (IMF) reached a deal with Argentina on Thursday to give the South American nation a $50-billion stand-by loan, the lender said in a statement.

"The Argentine authorities and IMF staff have reached an agreement on a 36-month Stand-By Arrangement (SBA) amounting to US$50 billion," the IMF said.

The disbursement needs the approval by the IMF’s Executive Board, which will consider Argentina’s economic plan in the coming days. Buenos Aires said it would draw on the first tranche but subsequently treat the loan as precautionary.

At the core of Argentina's economic plan is a rebalancing of the fiscal position to reduce federal government’s deficit, according to the IMF.

Argentine President Mauricio Macri asked IMF for $30 billion in financial aid last month as inflation soared and the national currency sank to a record low against the US dollar. The IMF said the stand-by arrangement still needed approval of its executive board. Argentina plans to draw on the first tranche but subsequently treat the loan as precautionary.

Meanwhile, US Treasury Secretary Steven Mnuchin praised the International Monetary Fund promise of a $50-billion loan to Argentina to implement economic reforms.

"I welcome the announcement today that Argentina and the staff of the International Monetary Fund have reached agreement on a package of pro-growth economic policy reforms that can be supported by IMF financial assistance," he said in a statement on Thursday.

The United States supports Argentine President Mauricio Macri’s efforts to transform the national economy through economic and financial policies, Mnuchin added.