Argentina seeks support from Brazil to pay IMF faster – 04/05/2023 – Market

Argentina is seeking further easing of targets in its $44 billion deal with the International Monetary Fund (IMF) and faster payments, and is pressing key IMF members the United States and Brazil to lend their support, IMF officials said. government.

The expectation is that the country will return to negotiations with the IMF this Thursday (4) on amending the agreement, which is under tension amid a historic drought that has affected the country’s main commercial crops, soybeans and corn, he said. a high-ranking official from the country’s Ministry of Economy.

Three government sources, which include an official from the Ministry of Economy, confirmed that the country is looking to accelerate disbursements, with around US$10.64 billion in funds scheduled to be delivered between June and December of this year.

The talks, after the IMF already loosened the program’s targets in early April, come as Argentina’s international reserves hit the lowest level in seven years as drought puts downward pressure on grain exports, the main source of dollars.

This threatens the country’s ability to meet future debt obligations and make payments in trade. Pressure has also increased on Argentina and the Fund to overhaul the debt program, the largest extended to any country in the world.

The ministerial official said that support from the United States and Brazil was critical for negotiations with the IMF and was optimistic about it, given the countries’ broader support for the Argentine economy.

An IMF spokesman said the Fund works “in close collaboration” with Argentine authorities to strengthen the program in the face of the impact of the severe drought.

“Discussions in the context of the next review are ongoing and continue in a constructive manner,” the spokesperson said.

US support is important because it is the largest shareholder in the IMF. Brazil, in turn, is Argentina’s main trading partner. Argentina would need to reach a technical agreement with the IMF team before any agreement goes for board approval.