IMF says Argentina loan terms under discussion

Washington (AFP) –


The board of the International Monetary Fund on Friday concluded an informal meeting on a loan program for Argentina but offered scant new details on the nature of pending support for the troubled Latin American economy.

In a statement, IMF Managing Director Christine Lagarde stressed that Buenos Aires would have political ownership of the program, which she said needed support from the Argentine public.

"This will be Argentina's economic program," Lagarde said in a statement.

"The authorities stressed that goals of the program would include creating a clear path to strong, sustained, and equitable growth and robust job creation," the statement said. "We fully endorse those goals."

Argentina requested the loan last week after a bout of financial turbulence hit the currency of Latin America's third-largest economy.

Despite reform efforts, the country once again finds itself facing a falling currency, high debt and soaring inflation.

However, Lagarde appeared to acknowledge that IMF support for Argentina could come with severe political hazards, given the bitter history the country has with the Washington-based lender, and the negative views on the conditions the fund might require.

More than a decade ago, Argentina paid off its last IMF loan and severed relations with the Fund.

Lagarde said Buenos Aires had been "conscious of the need to build and maintain social consensus."

"It was well understood that such an approach carried with it certain vulnerabilities."

Argentina will seek an "exceptional access" stand-by arrangement, the terms of which remain under discussion between IMF and Argentine officials, according to Lagarde.

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.