Argentina strikes $45 billion deal with IMF to refinance debt

Argentina struck a $44.5 billion deal with the International Monetary Fund (IMF) on Friday to refinance the country’s debt, announced President Alberto Fernandez.

Since 2020, Argentina has been in talks with the IMF over a program to refinance the country’s outstanding debt from a $58 billion loan of 2018. The South American government had a payment deadline of $700 million last Friday and another $365 million on Tuesday.

"We had an unpayable debt, which left us without a present and a future. Now we have a reasonable agreement that will allow us to grow and meet our obligations through growth," Fernandez said.

The IMF said it had reached an “understanding” with the Argentine government over what would be included in the final deal, including a plan for fiscal consolidation.

"IMF staff and the Argentine authorities have reached an understanding on key policies as part of their ongoing discussions of an IMF-supported program," said Luis Cubeddu, mission chief for Argentina.

"The agreed fiscal path would gradually and sustainably improve public finances and reduce monetary financing," he added.

The country agreed to reduce its fiscal deficit and cut the bank’s financing of the treasury, according to Economy Minister Martin Guzman. The new deal will allow Argentina to spend on infrastructure, science and technology, and social programs. Energy, on the other hand, will be reduced.

“We reached the best agreement we could achieve,” Guzman said.

As part of the discussions, the IMF gave Argentina four years and a half to pay back its debt. However, the deal still needs to be approved by the South American country’s congress and the IMF’s board of directors.