In the midst of a severe financial crisis, Argentina is on the verge of finalizing a staff-level agreement with the International Monetary Fund (IMF) over a review of the country’s $44 billion loan with the institution. The agreement comes as the South American nation grapples with high inflation, a significant fiscal deficit, and a drastic reduction in foreign currency income due to a devastating drought that has crippled its principal source of exports, agriculture. With maturities worth $3.4 billion due between July 31 and August 1 and the central bank’s net reserves deep in the red, Argentina is seeking to alter its economic goals and secure early disbursements from the IMF to alleviate its precarious financial situation.

Core Aspects of the Agreement Reached:

On Sunday, the IMF stated that the teams of the Economy Ministry, the Central Bank of Argentina, and IMF staff have concluded the core aspects of the technical work for the upcoming review. An agreement has been reached on the central objectives and parameters, which are expected to form the basis for a ‘staff level agreement’ in the coming days. The agreement aims to consolidate fiscal order and strengthen reserves while acknowledging the adverse effects of the severe drought on exports and tax revenues.

Tax and Currency Measures to Devalue the Peso:

As part of the deal with the IMF, Argentina is set to unveil tax and currency measures that will effectively devalue the peso. According to the Financial Times, Buenos Aires will introduce a new preferential exchange rate for agricultural exports and impose levies on imports. These measures are likely to impact the country’s currency and trade dynamics significantly and could have implications for inflation and overall economic stability.

Race Against Time: IMF Maturities and Depleted Reserves:

With IMF maturities of $3.4 billion due at the end of July and early August, Argentina faces a critical deadline. The central bank’s net reserves are currently in a precarious state, with approximately $6.5 billion in the red. The urgency to secure a staff-level agreement is paramount to receive much-needed financial assistance and prevent a further worsening of the country’s economic situation.

Seeking Early Disbursements to Tackle the Crisis:

In light of the severe financial crisis, Argentina aims to revise its economic goals agreed upon with the IMF. The country’s government hopes to bring forward some of the scheduled IMF disbursements for this year to address the pressing economic challenges promptly. By doing so, they aim to access funds that can be utilized to stabilize the economy, mitigate the impact of the drought, and provide relief to the struggling population.

Closing the Deal:

An Economy Ministry source indicated that the disbursement program for the second half of 2023 has already closed, further highlighting the urgency to reach a staff-level accord. It is expected that the agreement could be sealed as early as Wednesday or Thursday, which would pave the way for the next stage of the Argentina-IMF program review.


As Argentina teeters on the brink of a severe financial crisis, the impending staff-level agreement with the IMF holds significant importance. With key economic parameters agreed upon and tax and currency measures set to be introduced, the country is hoping to consolidate fiscal order and strengthen its depleted reserves. As the severe drought continues to impact exports and tax revenues, securing early IMF disbursements becomes crucial to address the immediate economic challenges and provide much-needed relief to the struggling nation. The coming days will determine Argentina’s ability to overcome its financial predicament and chart a path toward stability and growth.