IMF board to meet informally on Argentina loan May 18: spokesman

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Washington (AFP)

The International Monetary Fund board will meet informally on Friday to discuss a financial aid package for Argentina, which the IMF hopes to finalize quickly, a fund spokesman said Monday.

"This will be an informal meeting as part of our usual process of briefing the Board on negotiations for high access IMF programs," IMF spokesman Gerry Rice said in a statement.

Argentina requested the loan last week after a bout of financial turbulence hit the currency of Latin America's third largest economy but the loan is unlikely to be finalized this week.

"IMF staff are continuing discussions with the Argentine authorities toward a Fund-supported program," he said. "Our shared goal is to reach a rapid conclusion of these discussions."

Argentina is seeking a high access "stand by" financing arrangement which would provide funds above the normal loan amount but officials have not said how much they are requesting.

After taking office in December 2015, President Mauricio Macri floated the Argentine peso, ending the strict controls in place under the government of Cristina Kirchner, and began to address outsized government spending.

Despite the reform efforts, the country once again finds itself facing a falling currency, high debt and soaring inflation. Macri said he was requesting IMF help as a "preventative" measure.

IMF chief Christine Lagarde said last week that she strongly supports the reform plan in Buenos Aires and wanted to move quickly help the country "in light of renewed and significant financial market volatility."

But going to the IMF for help is a risky move for a country where the Washington-based lender has frequently been portrayed as the culprit behind economic hardships, rather than a benefactor.

In January 2006, Argentina paid down its last loan to the IMF and severed relations with the organization, refusing even to allow the regular annual review of economic conditions conducted for all member countries for the next 10 years.

IMF stand-by loans last for up to three years but more usually last 12-24 months. They require regular reviews by IMF staff to make sure the government is following through on reform commitments and meeting targets for things such as spending cuts and pension reforms.