IMF: All you want to know about Argentina

Argentina, Buenos Aires. (IMF photo).

This article is brought to you in association with the International Monetary Fund

Written by IMF staff

Frequently asked questions about Argentina, June 7, 2018

How much money will be disbursed to Argentina to support the new economic plan?

Argentina and IMF staff have reached an agreement on an economic plan that can be supported by IMF financing in the form of a Stand-By Arrangement for about US$50 billion. The agreement is pending IMF Executive Board approval. If approved, Argentina would be eligible to access the initial installment of the loan.

How did Argentina and the IMF arrive at the loan amount?

The Argentine government requested IMF financial support in late May to help strengthen their economy in light of the recent financial market turbulence. Following that request, an IMF team held discussions with the government to assess the economic and financial situation and the size of the country’s overall financing needs. They also agreed on the appropriate policy response. While the total amount of money available to Argentina is $50 billion, the government has indicated that it will draw on the first installment of that amount but intends to subsequently treat the loan as precautionary. The loan can be thought of as a credit line that Argentina can tap as needed during a three-year period.

What is the purpose of the loan?

The money will be used to support the government’s economic priorities, which include strengthening the Argentine economy and protecting the living standards of the Argentine people.

What are the priorities in the plan agreed between IMF staff and the Argentine authorities?

At the core of the government’s economic plan is a rebalancing of the fiscal position. The Argentine authorities intend to accelerate the pace at which they reduce the federal government’s deficit. This measure will ultimately lessen the government’s financing needs and put public debt on a downward path.

The plan also aims to lower inflation, which eats into the foundation of Argentina’s economic prosperity and is borne directly by society’s most vulnerable.

In addition, the plan will put in place measures to offer opportunity and support to the less well-off members of Argentine society. The authorities have committed to ensuring that spending on social assistance, as a share of GDP, will not decline during the next three years.

What is an IMF Stand-By Arrangement?

The Stand-By Arrangement (SBA) is a financing tool of the IMF available to any member country that needs financing to overcome balance of payments problems. The SBA allows the IMF to respond quickly to a country’s external financing needs and supports policies designed to restore sustainable growth. All member countries facing external financing needs are eligible for SBAs, but this option has been more often used by middle-income or high-income countries, since low-income countries have access to a range of concessional instruments.

How long does a negotiation for an SBA last, and what does it entail?

The negotiation process usually takes weeks. A country must first request financial support from the IMF. Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation and the size of the country’s overall financing needs, and agree on the appropriate policy response. The member country has primary responsibility for driving the design of the policies that will make the IMF-supported program successful and for implementing them. Typically, a country’s government and the IMF must reach understandings on a program of economic policies before the IMF lends money to the country.

What is the typical duration of an SBA?

The length of an SBA is flexible, and typically covers a period of 12–24 months, but no more than 36 months, consistent with addressing short-term balance of payments problems. Repayment of resources received under the SBA is due within 3¼-5 years of disbursement, which means each disbursement is repaid in eight equal quarterly installments beginning 3¼ years after the date of each disbursement.

How much can the IMF lend to a country under the SBA?

The access limit for nonconcessional lending is 435 percent of a country’s quota, or calculated share in the IMF, net of repayments, over the life of the program and 145 percent of quota on an annual basis. Under the IMF’s “exceptional access policy,” the Fund can lend above these normal limits on a case-by-case basis, subject to study and approval by the Fund’s Executive Board—a 24-person panel that represents the interests of all member countries whose contributions to the IMF are used to finance members in need.

How flexible are IMF lending arrangements?

After understandings are reached on an economic program, the IMF monitors a country’s progress toward achieving its goals. Regular reviews by the IMF’s Executive Board play a critical role in assessing performance under the program and allowing the program to adapt to economic developments. The SBA framework allows for some flexibility in the frequency of reviews based on the strength of the country’s policies and the nature of its financing needs. In addition, we would take into account any unforeseen circumstances that arise over the course of a program—for example, if a country is hit by a shock, such as a natural disaster.

How does the IMF include the views of the society in its policy negotiations?

The IMF maintains an open dialogue with a wide range of citizens in its member countries. We engage regularly with not only the government but also labor unions, academics, students, private sector analysts, think tanks, faith-based associations, and local community groups. This broad engagement can highlight important issues, offer information to supplement official data, and provide insights that may differ from perspectives in official circles.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

93 million children with disabilities ‘among the most likely to be left behind’: UN rights chief

Accelerating a more sustainable industrial revolution with digital manufacturing

Trust links up supply chains. How do you establish it in the digital era?

We need to talk about failure in the social sector

Israel is joining forces with Arab states to save coral from climate change destruction

Why banks escape from competition rules but not pharmaceutical firms

A critical European young voice on Net Neutrality: the distance between Brussels and Washington

The next EU President will first have to drink his tea at Downing Street

COP21 Breaking News_10 December: the final sprint of the Final Agreement Negotiations

Ambassador Zhang Ming: “Work Together for a Better Globalization”

EU’s new environmental policy on biofuels impacts both the environment and the European citizen

YO!Fest back in Strasbourg for the 2nd edition of the European Youth Event – 20-21 May 2016

Idlib deal could save three million ‘from catastrophe’ says UN chief, as militants are urged to lay down arms

What does global health translate into?

UN calls for support to implement Central Africa’s newly minted peace agreement

The global suicide rate is growing – what can we do?

‘Continuing absence’ of political solution to Israel-Palestine conflict ‘undermines and compounds’ UN efforts to end wholesale crisis

Parliament adopts new rules for short-stay visas

UN refugee agency presses States to aid 49 refugees stranded on Mediterranean

Can we balance conservation and development? Science says yes

The IMF overstates the risks for Eurozone and downgrades the threats for the US economy

Mechanism to protect democracy in the EU needed more than ever, says the EP

Main results of Environment Council of 09 October 2018

Better training ‘a necessary and strategic investment’ in peacekeeping that saves lives: Guterres

Monsoon rains turn millions of children’s lives ‘upside down’ across South Asia

EU’s Finance Ministers draft plan to raise tax bills of online giants like Google and Amazon

Access to health in the developped and developing world

Brexit: Britain and the Continent fighting the battle of Waterloo again

As inequality grows, the UN fights for a fairer world

Towards seamless patent registration and protection in 25 EU countries

This new form of currency could transform the way we see money

EU-China relations under investigation?

Trade, taxes and other takeaways from Li Keqiang’s speech to the World Economic Forum

ILO discusses world of work response to global refugee crisis

Militias force nearly 2,000 to leave Libyan capital’s largest shelter for internally-displaced: UNHCR

Scale of displacement across Myanmar ‘very difficult to gauge’, says UN refugee agency

Why Microsoft is a regular to Almunia’s

WEF Davos 2016 LIVE: “European unity and cooperation is being called on question”, Vice President Joe Biden criticizes from Davos

How to unleash the enormous power of global healthcare data

Britain in chaos: May stays as Tory leader and PM but none can defuse the Brexit time bomb

“We need to accelerate our negotiation on the China-EU Investment Treaty”, Chinese Premier Li Keqiang highlights from the 21st EU-China summit in Brussels

Pumping more money into banks but leaving them unregulated doesn’t help

Schools in Florida now have to teach mental and emotional health

“Leaked” TTIP document breaks post 8th negotiations round silence and opens door to critics

Brexit: UK business fear of a no-deal scenario preparing for the worst

After music and TV, where will the streaming revolution take us next?

UK Labour Party leader Corbyn readies to change Brexit political backdrop

5 technologies that will forever change global trade

The world needs carbon-neutral flying. Here’s how to bring it one step closer

The glimmers of hope in the latest dire climate report

Who is to lose from the 6-month extension of the EU economic sanctions against Russia?

Large parts of the world are growing more fragile. Here are 5 steps to reverse course

These are the world’s most positive countries

This Japanese company pays its employees to get a good night’s sleep

COP24: Huge untapped potential in greener construction, says UN environment agency

Sweden is a top performer on well-being. Here’s why

Could play be a game-changer for the world’s forests?

UN affirms ‘historic’ global compact to support world’s refugees

Eurozone banks are unable to support real economy’s dawning growth

Getting vaccinated should just be considered a human right?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s