June 8 (UPI) — The Argentine government has secured possibly the largest financial lifeline ever given by the International Monetary Fund — a $50 billion line of credit to help restore investor confidence.
The U.S.-based IMF said Thursday negotiators reached a 36-month agreement with Buenos Aires, which reached out for assistance last month as the value of its currency plunged.
The loan has been agreed upon, but still must be approved by the IMF board.
“The package includes an immediate withdrawal of 30 percent, or $15 billion, and then we will see,” Argentina finance minister Nicolas Dujovne said.
The loan could be the largest amount ever given by the IMF for emergency relief.
IMF Managing Director Christine Lagarde said the financial package should bolster market confidence and allow officials time to address a range of long-standing vulnerabilities.
“As part of this support, both the IMF and the Argentine government intend to work together to ensure steps are taken, and the resources are fully available, to protect the most vulnerable in the population as economic reforms move forward,” Lagarde said.
Under the deal, Argentina has agreed to reduce its fiscal deficit to 1.3 percent of its gross domestic product and cut inflation to 17 percent by next year. Further reductions in inflation are expected in 2020 (to 13 percent) and 2021 (9 percent).