The International Monetary Fund’s (IMF) Executive Board announced on Thursday it had approved the second review of Argentina’s 48-month Extended Fund Facility (EFF) agreement signed in 2025.
As a result, the country will receive about US$1 billion, equivalent to 0.8 billion of Special Drawing Rights (SDR), the IMF’s international reserve asset. With these funds, 80% of the initially agreed US$20 billion has already been completed.
Economy Minister Luis Caputo shared the information on social media and also posted the report prepared by the lender’s board.
Last week, IMF spokesperson Julie Kozack confirmed during a press conference that IMF “board approval” this week would unlock the disbursement.
The statement
IMF Managing Director Kristalina Georgieva released an official statement on Thursday evening praising Argentine authorities for making “strong progress in stabilizing and creating a more market-oriented economy under the Extended Fund Facility arrangement.”
The IMF chief went on to say that authorities were “committed” to maintaining fiscal balance through “further reductions in energy subsidies, improved targeting of social transfers, and containment in discretionary spending to offset the impact of congressional spending initiatives.”
Georgieva pointed out that political uncertainty due to elections in 2025 temporarily weighed on growth, disinflation, and external stability. Subsequent adjustments, however, had led to a “buildup in reserves, renewed disinflation, and improved market confidence, despite a more complex global backdrop.”
She added that “the authorities remain committed to sustaining stability through a balanced policy package that supports disinflation while strengthening external sustainability and fostering growth, including to secure timely and durable international market access.”
On the monetary front, the IMF recommended continuing to “support disinflation and enhanced exchange rate flexibility.”
This would require “continued efforts to strengthen central bank transparency and communication,” as well as measures to further contain interest rate volatility to improve monetary transmission and credit allocation.
According to the organization, this “should be complemented by the implementation of a pronged financing strategy to restore timely and durable international market access, including to refinance large near-term public sector FX obligations and gradually reduce Fund exposure.”
At the same time, it stressed the need to further strengthen regulatory and supervisory frameworks to support capital market deepening while containing financial vulnerabilities.
The IMF also mentioned that “progress in deregulating the economy and adopting reform legislation in the fiscal, trade, and labor areas have been impressive. Efforts should continue in creating a more competitive and open economy, including by improving the predictability of tax and regulatory frameworks, to unlock the potential of Argentina’s strategic sectors in agriculture, energy, mining, and the knowledge economy.”
The statement concluded by noting that “against elevated external and domestic risks, agile policymaking and contingency planning remain essential to safeguarding program objectives.”
“Clear policy communication, together with well-targeted social support to mitigate near-term adjustment costs, will be critical to sustaining policy continuity and societal support for Argentina’s reform program.”
