After the approval by Congress of the authorization for the Executive Branch to reach a new agreement with the International Monetary Fund, President Javier Milei set a deadline for the completion of the first stage, which consists of the technical agreement with the organization's staff.
According to Bloomberg Línea, the Argentine president stated: "Mid-April." The national government had a plan that contemplated an approved and in-force program by the end of the first quarter, that is, by the end of April. This date was confirmed by the presidential spokesperson, Manuel Adorni, during a press conference on Thursday.
The Minister of Economy, Luis "Toto" Caputo, and the President of the Central Bank, Santiago Bausili, are responsible for overseeing the technical negotiation, which must determine, before its presentation to the IMF board, the total amount of the operation, which will include both new funds and the refinancing of existing maturities.
Yesterday, the Chamber of Deputies supported the authorization through a DNU that the Executive Branch issued to finalize a new technical agreement with the IMF, which will then be sent to the board for final approval.
With the legislative and regulatory issue solved by decree, the economic team now faces a new series of meetings with the IMF's technical staff to conclude the details of the agreement.
The details of the agreement
The DNU doesn't specify much of the content of the agreement, but it does make clear the framework in which it will develop. The new program is based on an Extended Fund Facility (EFF), with an estimated duration until 2035.
This type of agreement offers longer terms for loan repayment and includes a grace period of four and a half years, during which Argentina will not have to make principal payments to the IMF. This measure aims to alleviate the short-term financial burden and favor a more stable economic recovery.
Although the total amount of the agreement has not yet been revealed, market estimates suggest it could range between 20,000 and 25,000 million dollars. This financing would include the renewal of existing debt maturities, with about 14,000 million dollars allocated solely to capital refinancing, and an additional portion to cancel Non-Transferable Notes.
The four and a half year grace period means that Argentina will begin making principal payments to the IMF starting in 2029. As for the interest rate, it is expected to be lower than what Argentina could obtain in international markets. Although some private estimates indicated a higher rate, the Secretary of Finance, Pablo Quirno, confirmed before the bicameral Legislative Procedure that the rate will be 5.63% annually in dollars.
A significant portion of the funds from the IMF will be allocated to the repurchase of Non-Transferable Notes issued by the Ministry of Economy and currently held by the Central Bank. These notes, which amount to around 23,000 million dollars, represent a significant portion of the Central Bank's assets.
