IMF said negotiations with Argentina are aimed at a new loan program


PHOTO: The International Monetary Fund (IMF) logo seen outside the headquarters building in Washington DC, USA, September 4, 2018 REUTERS / Yuri Gripas / File Photo

WASHINGTON (Reuters). The International Monetary Fund and Argentina are in talks on a new expanded financing program to resolve the South American country’s $ 45 billion debt to the Fund, an IMF official said Thursday.

Jerry Rice said in a briefing that “very productive discussions” have taken place over the past few days between IMF staff and the Argentine authorities, but declined to name a timeline for a potential agreement.

He said discussions focused on Argentina’s policies aimed at economic recovery and stability, job creation and the development of domestic capital markets to mobilize domestic revenues.

When asked if Argentina would be considered a “vulnerable” country and eligible for additional special drawing rights from the IMF after the $ 650 billion disbursement, Rice said such lending facilities are still under development.

“As far as the question of what constitutes a vulnerable country, we are still not quite close to defining what that will mean,” Rice said.

The IMF is on track to allocate $ 650 billion in reserve allocations to member countries pro rata to their membership by the end of August. Argentina, which has 0.67% of the IMF’s current quota resources, will receive SDRs worth about $ 4.4 billion directly.

Rice said the IMF’s Poverty Reduction and Growth Fund could act immediately as a mechanism for rich countries to channel their surplus SDRs to low-income countries. But the launch date for the IMF’s proposed Sustainability and Resilience Trust, which could allow more SDRs to be channeled to some vulnerable middle-income countries, has not been set.

Reporting by David Loder; Edited by John Stonestreet and Paul Simao

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