IMF agrees to release $7.5 billion to cash-strapped Argentina as its economy reels from drought

BUENOS AIRES, Argentina (AP) — The International Monetary Fund said Friday that it reached an agreement with Argentina that would open the door for the cash-strapped South American country to receive $7.5 billion over the next few months as part of an existing program.

The agreement, which was under negotiations for weeks, still needs approval from the IMF Executive Board, which is scheduled to meet in the second half of August, the international financial organization said in a news release.

The deal officially combines the fifth and sixth reviews of a 30-month $44 billion loan program that was agreed to in 2022. The sixth review of the agreement, which Argentina is partly using to pay back existing debt with the IMF, had been scheduled for September.

With the terms announced Friday, the IMF seeks “to support Argentina’s policy efforts and near-term balance of payments needs, including obligations to the fund.”

By combining the fifth and sixth program reviews, Argentina won’t have to go through another review process before the country’s October presidential election. The next review now is set to take place in November.

Economy Minister Sergio Massa is the ruling party’s candidate in the race as President Alberto Fernández is not running for reelection.

The IMF said it had agreed to ease some of the requirements of its loan program in part because “ Argentina’s economic situation has become very challenging due to the larger-than-anticipated impact of the drought, which had a significant impact on exports and fiscal revenues,” the organization said, referring to a devastating drought that decimated the country’s cash crops.

At the same time, the IMF said there had been “policy slippages and delays” on Argentina’s part.