The Executive Board of the International Monetary Fund (IMF) today approved a three-year Stand-By Arrangement (SBA) for Argentina amounting to US$50 billion (equivalent to SDR 35.379 billion, or about 1,110 percent of Argentina's quota in the IMF).
The Board's decision allows the authorities to make an immediate purchase of US$15 billion (equivalent to SDR 10,614, or 333 percent of Argentina's quota). One half of this amount (US$7.5 billion) will be used for budget support. The remaining amount of IMF financial support (US$35 billion) will be made available over the duration of the arrangement, subject to quarterly reviews by the Executive Board. The authorities have indicated that they intend to draw on the first tranche of the arrangement but subsequently treat the remainder of the arrangement as precautionary.
The Argentine authorities' economic plan backed by the SBA aims to strengthen the country's economy by restoring market confidence via a consistent macroeconomic program that lessens financing needs, puts Argentina's public debt on a firm downward trajectory, and strengthens the plan to reduce inflation by setting more realistic inflation targets and reinforcing the independence of the central bank. Importantly, the plan includes steps to protect society's most vulnerable by maintaining social spending and, if social conditions were to deteriorate, by providing room for greater spending on Argentina's social safety net.