IMF extends $50-bln credit line to Argentina

BUENOS AIRES, June 8, 2018 – The Argentinian government has struck a deal with the IMF under which the latter will extend a USD 50-billion credit line to help stabilise the country’s economy, international media reported Thursday.

Specifically, the money will be used to stabilise the Argentine peso, which began rapidly depreciating in early May, so that the country can shrink its fiscal deficit and pay down debts.

“We are convinced that we’re on the right path, that we’ve avoided a crisis,” finance minister Nicolás Dujovne said at a press conference in Buenos Aires. “This is aimed at building a normal economy.”

The IMF’s executive board is expected to approve the credit line on June 20, after which USD 15 billion will immediately be made available to Argentina, Minister Dujovne said.

“At the core of the government’s economic plan is a rebalancing of the fiscal position,” IMF managing director Christine Lagarde said. “We fully support this priority and welcome the authorities’ intention to accelerate the pace at which they reduce the federal government’s deficit, restoring the primary balance by 2020.”

In 2017, Argentina’s primary fiscal deficit and total budget deficit reached 3.9% and 6.5% of GDP, respectively.

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