Today: Wednesday, 29 May 2024 year

IMF increases Argentina bailout to $57bn

IMF increases Argentina bailout to $57bn

Argentina used to face a budget deficit and economic crisis, so, IMF financial support is highly appreciated. The international body decided to lend an extra $7.1bn to the South American country as part of its bailout package, which is now the multilateral lender’s biggest programme ever.

IMF managing director Christine Lagarde announced on Wednesday that in the event of extreme overshooting of the exchange rate, Argentina’s Central Bank may prevent disorderly market conditions by conducting a limited intervention. The expansion of social protection is one of the key priorities for IMF and Macri’s government.

Last month, President Mauricio Macri asked the IMF to accelerate its emergency package, which makes credit available to Argentina, now, it will make about $50bn in credit available through 2019 – $19bn more than previously anticipated. According to Lagard, it is “essential” that Argentina’s Congress approves the 2019 budget. IMF head emphasised that an objective of the revised plan was to protect the most vulnerable. In Argentina, an inflation is expected to rise by more than 40 per cent while its economy is expected to contract more than 2 per cent this year.

“We are pleased to see a firm commitment [by the Argentine government] to the expansion of social protection,”

Christine Lagarde said, underlining that this is extremely important for the IMF.

President Mauricio Macri and his government have promised to balance the budget next year.

During the press conference in New York on Wednesday, Ms Lagarde told to the journalists that a great deal of work remains to be done if Argentina is to respond effectively to the current crisis. Argentina’s effort is just beginning but the Fund is committed to continuing supporting the Argentine authorities in their efforts.