A delegation of senior economic officials is in Washington to advance negotiations for a new loan of the International Monetary Fund, just when an internal control office of the agency provided a critical report to the Executive Board on exceptionally high credits like the one granted to Argentina in 2018.
The Secretary of Finance, Pablo Quirno; the Secretary of Economic Policy, José Luis Daza, and the vice president of the Central Bank, Vladimir Werning, are meeting these days in the US capital with IMF technicians to discuss how to finalize the current program with the organization and sign another agreement that includes a new disbursement that serves to shore up the economy and accelerate the exit from the stocks.
The atmosphere is one of secrecy. “They are informal meetings, there is no pre-established agenda,” they told Clarion from Economy, while the IMF did not comment on the conversations.
There are still two reviews of Alberto Fernández’s plan, still in force, which expires at the end of the year and which contemplates some $1 billion in disbursements. But The Government seeks to join them with a new program that includes more fresh money (at the beginning of the year they were enthusiastic about US$ 15,000 million but then the claims became more moderate) to reinforce the reserves and be able to get out of the stocks without major turbulence.
President Javier Milei and his economic team They anxiously await the arrival of Donald Trump to the White House (January 20) because they estimate that good harmony between both leaders will be crucial when it comes to receiving the support of the United States on the executive board of the organization from where, despite being delighted with Milei’s reforms, The rest of the G7 countries still view Argentina with some distrust given its history of serial non-compliance.
However, Argentine enthusiasm could find a brake because the Independent Evaluation Office, which is the internal control body of the Fund, He presented a report at the board meeting this Thursday in which he criticized the bank’s process for granting unusually high loans to countries in difficulty, among them Argentina, according to the agency Bloomberg.
Argentine credit, under the IMF’s magnifying glass
The Fund’s Independent Evaluation Office studied approximately 20 years of loans under the so-called Exceptional Access Policy, including the US$44 billion loan to Argentina in 2018, when Mauricio Macri was in power and received support from Trump since his first term in the White House.
The report “examines the justification and evolution of the policy since 2002, the application of the criteria of exceptional access and variations in the design and implementation of the program,” as published by the Office on its website.
It also “assesses whether the policy has achieved its intended objectives, which include shaping member country and market expectations, providing clearer reference points for Board decisions on program design and exceptional access, safeguarding Fund resources and help ensure uniform treatment of members.
It is based on the experiences of 38 exceptional access programs completed by mid-2023, including those in Argentina (2018), Ecuador (2020) and Egypt (2020).
According to the agency Bloombergthe Office prepared a set of recommendations and The report criticizes the lack of consistency in credit policywhich is modified country by country and not as a result of periodic reviews. The Office did not respond to the query Clarion on the topic.
The report also determined that the loans analyzed were not effective in catalyzing private sources of financing For borrowers, one of the main reasons why a country in financial trouble seeks assistance from the IMF.
The exceptional access policy, adopted in 2002 for countries with large financing needsallows countries to receive funds that far exceed their “quota” with the IMF. The report recommended that the agency set clearer expectations for programs of countries where the debt falls into the so-called “gray zone”, which is the debt considered sustainable but not with a high probability.
These warnings could lead the board to analyze in more detail a possible new program with Argentina. Although it is estimated that it would be approved, it may be toughened in some points. The agency’s spokesperson, Julie Kozack, admitted for the first time weeks ago that they are currently studying “the option of moving to a new agreement.”
However, he warned that to sustain the “incredible results” that the Government is achieving, ““It is of decisive importance to continue adopting a group of coherent policies, especially in fiscal and monetary matters.”