IMF reaches deal with Argentina on $20 billion bailout

[MilHojas]

https://www.politico.com/news/2025/04/08/imf-reaches-deal-with-argentina-on-20-billion-bailout-00280330

The International Monetary Fund on Tuesday said it has reached a preliminary agreement with Argentina on a $20 billion bailout, providing a welcome reprieve to President Javier Milei as he seeks to overturn the country’s old economic order.

IMF confirms staff-level agreement for US$20 billion deal with Argentina - Buenos Aires Herald

The Fund did not give the value of the initial disbursement in a brief statement Tuesday

buenosairesherald.com

 

[Redpossum]

Look at that picture at the top of the article and tell me, where's her arm? Look at her right arm, the one extended toward Caputo. The sleeve extends toward him, and then there's nothing.

In any case, it makes me sick when they say things like "rapid disinflation". Say &^*%#@ WHAT? Hello, hello, Argentina calling IMF, what disinflation? Prices are still going up!

And apparently the obvious evidence of massive corruption at the highest levels in the Libragate scandal troubles the IMF not at all...

 

[carride]

The agreement has yet to be discussed and approved by the IMF’s executive board in a meeting expected to take place “in the coming days,” according to a statement by the lender

Not the 40% up-front that Caputo was suggesting last week

The new deal is a 48-month Extended Fund Facility (EFF), a type of deal the IMF gives to “countries experiencing serious payment imbalances,” according to the lender’s website. EFFs require countries to adopt structural reforms and disbursements are conditional on certain performance criteria

 

[FrankPintor]

Look at that picture at the top of the article and tell me, where's her arm? Look at her right arm, the one extended toward Caputo. The sleeve extends toward him, and then there's nothing.

In any case, it makes me sick when they say things like "rapid disinflation". Say &^*%#@ WHAT? Hello, hello, Argentina calling IMF, what disinflation? Prices are still going up!

And apparently the obvious evidence of massive corruption at the highest levels in the Libragate scandal troubles the IMF not at all...

Nor do the multiple violations of the IMF's own statutes and rules seem to matter to them. USD 20 Billion more to blow on defending the exchange rate, and the only objective is to get Milei to the mid-term elections before everything goes tits-up.

You surely don't suspect friends helping similar-minded and equally corrupt friends out? If a government with a social conscience or policies tried any of this it would fail instantly, there would be zero support. As none other than Hugo Chavez said, "for my friends, everything; for everyone else, the law". I have to say, in time, even the soul gets calloused.

Though, the libertarians tend to trip over themselves in their scramble for power and favours: the corrupt Trump flunkey, (sorry, special envoy to Latin America) Claver-Carone, fired from the Bank of International Development for ethics violations, is now insisting Argentina renounce its USD 18 Billion currency swap arrangement with China. So, lose 18 Billion to gain 20 Billion, that sounds great, and we'd be still in hock to the IMF. Sounds like a plan

 

[elhombresinnombre]

Look at that picture at the top of the article and tell me, where's her arm? Look at her right arm, the one extended toward Caputo. The sleeve extends toward him, and then there's nothing.

In any case, it makes me sick when they say things like "rapid disinflation". Say &^*%#@ WHAT? Hello, hello, Argentina calling IMF, what disinflation? Prices are still going up!

And apparently the obvious evidence of massive corruption at the highest levels in the Libragate scandal troubles the IMF not at all...

Well spotted @Redpossum! The shonky PhotoShop/AI picture, coupled with the departure from the norms mentioned by @FrankPintor made me wonder if the whole thing was a fake news story but no, although the picture doesn't seem to appear elsewhere, the announcement is almost word-for-word taken from the IMF's own press release.

 

[Redpossum]

Well spotted @Redpossum! The shonky PhotoShop/AI picture, coupled with the departure from the norms mentioned by @FrankPintor made me wonder if the whole thing was a fake news story but no, although the picture doesn't seem to appear elsewhere, the announcement is almost word-for-word taken from the IMF's own press release.

The last statement from IMF said, "it's down to the board of directors to decide", and that's still the case according to this news item. So it doesn't seem that anything has changed, why the announcement? Is it just something they did at Milei's request, to calm the nerves of those who scan the headlines but never read any further?

 

[LuckyLuke]

"Argentina is going through an international reserve scarcity crisis. Gross international reserves now sit at US$24.6 billion while net international reserves are around minus US$10 billion. The Central Bank was forced to sell dollars in 18 out of the last 19 working days amid local and international market volatility."

Boy that's a doozy of a paragraph. Per the IMF website, the EFF loan is for countries facing serious medium-term balance of payment problems. It goes on to say...

"Balance of payment problems occur when a nation is unable to pay for essential imports or service its external debt."

Color me wrong, but that sounds to me like something much more serious than a failing currency peg is on the horizon...

 

[FrankPintor]

"Argentina is going through an international reserve scarcity crisis. Gross international reserves now sit at US$24.6 billion while net international reserves are around minus US$10 billion. The Central Bank was forced to sell dollars in 18 out of the last 19 working days amid local and international market volatility."

Boy that's a doozy of a paragraph. Per the IMF website, the EFF loan is for countries facing serious medium-term balance of payment problems. It goes on to say...

"Balance of payment problems occur when a nation is unable to pay for essential imports or service its external debt."

Color me wrong, but that sounds to me like something much more serious than a failing currency peg is on the horizon...

I think the IMF is misrepresenting the loan, Argentina isn't facing loan repayments this year, so I don't see where there could be a "serious medium-term balance of payment problem".

The Economist commented that in the case of Argentina, since the IMF is a long-term partner, not a lender of last resort, it should take its place in the queue with the commercial lenders in the case of a default, rather than being first in the queue as is the convention.

It's fairly clear (to me, at least), that this is a loan organised by "friends of Milei" to get him to the mid-term elections without a major meltdown. Rinse and repeat the Macri loan, with the same cast(e) of characters. I know there's some serious competition from the Kirchners, but has any family done so much damage to Argentina in recent years as the Macris? USD 40 Billion of debt, going on for 60, for nothing...

Unfortunately, the IMF is based in Washington, so it's easy to lean on and corrupt. Now, Milei has USD 20 Billion to burn through to defend the over-valued Peso, and I'm sure he will do that. Other than that, I don't see that there is a plan (a serious government would be lining up capital investment projects to take advantage of the loan). Milei can party for now, but I expect a major hangover (devaluation) after the elections, once the money's gone.