IMF Approves $2 Billion for Argentina Amid Peso Slide

The IMF approved a $2 billion disbursement to Argentina, despite missing a target for building up its net international reserves. The peso has slid 12% in July, its worst month in over a year, amid dwindling dollar supply and uncertainty ahead of October's midterm elections. The IMF's managing director praised Argentina's new economic program, which has relaxed currency and capital controls, but emphasized the need for sustained efforts to rebuild reserves.

The International Monetary Fund (IMF) has approved a $2 billion disbursement to Argentina, marking the first review of the country's $20 billion Extended Fund Facility (EFF) arrangement. This approval comes despite Argentina missing a mid-June target for building up its net international reserves. The peso has experienced significant depreciation, sliding 12% in July, its worst month in over a year, due to dwindling dollar supply and political uncertainty ahead of October's midterm elections [1][2][3].

The IMF's Executive Board completed its first review of the program on July 31, noting that strong policy implementation has supported a smooth transition to a more flexible exchange rate regime. The fund acknowledged that Argentina missed its mid-June target for net international reserves accumulation but praised the country's progress in reducing inflation and achieving economic growth. The IMF staff emphasized the need for Argentina to continue rebuilding its reserves and creating a more open, resilient, and market-based economy [1][2].

The IMF's managing director, Kristalina Georgieva, highlighted that the new phase of the economic program has relaxed currency and capital controls, allowing the peso to float within a target band. However, she underscored the importance of sustained efforts to rebuild reserves to better manage shocks and durably access international capital markets at more favorable terms [3].

Since the program's start, Argentina has struggled to accumulate foreign currency reserves, prioritizing a strong peso ahead of the October midterm vote to lower inflation. The country has primarily used bond sales and repurchase agreements with international banks to acquire reserves. In recent weeks, the Treasury bought $1.5 billion using its fiscal surplus [1][3].

Argentina's economy is expected to grow 5% this year after contractions in the past two years, according to the central bank's most recent survey of analysts. Monthly inflation in May cooled to its lowest level since the pandemic, only mildly accelerating in June [3].

References:
[1] https://buenosairesherald.com/economics/imf-reaches-staff-level-agreement-for-us2-billion-disbursal-to-argentina
[2] https://www.reuters.com/world/americas/imf-board-completes-first-argentina-program-review-approves-2-billion-2025-07-31/
[3] https://www.bloomberg.com/news/articles/2025-07-31/imf-approves-2-billion-disbursement-to-argentina-as-peso-slides