Argentina is negotiating an initial disbursement of USD 12 billion with the IMF

Argentina is in the final stage of negotiations with the International Monetary Fund (IMF) for a new extended facilities program totaling USD 20 billion, which would have a significantly larger initial disbursement than publicly anticipated. According to sources with direct knowledge of the talks, a first tranche of between USD 10 billion and USD 12 billion is being discussed, instead of the USD 8 billion floor that was initially considered.

These conversations take place within the framework of Argentina's strategic position in the face of global financial instability, resulting from the imposition of tariffs by the United States, and the local need to restore the balance of the Central Bank of the Argentine Republic (BCRA). The Government considers it crucial to strengthen international reserves to move toward a liberalization of the foreign exchange market in a second stage of the economic program.

The negotiation between the Argentine Executive and the IMF technical staff is progressing informally, awaiting a new meeting of the member countries' representatives, scheduled for the end of next week, which could unlock a Staff Level Agreement and enable the subsequent Board vote.

During an interview, the Minister of Economy, Luis "Toto" Caputo, confirmed that the Government requested a first disbursement exceeding 40% of the total program, that is, at least USD 8 billion. "The fiscal and monetary adjustment has already been made. Now we must focus on restoring the Central Bank's balance," the official noted. In that regard, Caputo emphasized that any incoming amount will be freely available and can be used to cancel Non-Transferable Treasury Bills, allowing the BCRA to use foreign currency without restrictions.

The current discussion also revolves around the sequence of the following disbursements over the next four years, during which commitments with the organization amounting to approximately USD 14 billion are due, with the schedule starting at the end of 2025. This situation implies that any new tranche will increase the Fund's exposure to its main debtor, as the organization has already lent Argentina around USD 41 billion in previous programs.

In an informal IMF Board meeting held on March 25, the possibility of authorizing a first tranche of USD 15 billion was analyzed, although there was ultimately not enough consensus. According to Bloomberg, a new meeting was held this week without reaching a concrete decision. However, among the strongest options continues to be a first tranche of between USD 10 billion and USD 12 billion.

Meanwhile, the political support of the United States is beginning to play an important role. This week, Congresswoman María Elvira Salazar, close to the Milei administration, sent a letter to the U.S. Treasury Secretary, Scott Bessent, requesting that he urge the IMF to support the Argentine program. In her proposal, she asked that the organization authorize an initial disbursement equivalent to 75% of the total agreed, that is, USD 15 billion. The request was shared on social media and echoed by President Javier Milei, Minister Caputo, and BCRA head Santiago Bausili.

In the financial sphere, the Government is also exploring other sources to capture foreign currency. Contacts with international banks are maintained to evaluate a new bidding for a REPO (Repurchase Agreement), with the aim of obtaining liquidity before the capital payment to bondholders scheduled for July. Additionally, the BCRA hopes to achieve a refinancing of USD 5 billion of the swap with China, which begins to mature in June and extends until July 2026. The activation of these additional avenues largely depends on the successful closure of the new agreement with the IMF.

The Government confirmed that the program with the Fund will be USD 20 billion and clarified that the interest to be paid over the next four years should not be deducted from the total amount, as these commitments will only become relevant starting in 2027.