Investing.com - Rumours are rife that Argentina is inching closer to an agreement with the International Monetary Fund (IMF), which could potentially unlock much-needed funds to repay $2.6 billion in loans. This development, anticipated by week's end, has been seen as a sign of continued support from the lender towards Argentina's faltering economy.
Kristalina Georgieva, Managing Director of IMF, is said to be engaged in crucial discussions with Argentine officials. Insiders privy to these talks expect an announcement soon - possibly even this Thursday evening.
The impending deal would pave the way for further disbursement from a larger $44 billion loan package – marking it as IMF’s most substantial loan to date. The urgency stems from an upcoming July 31 deadline when Argentina must reimburse part of its previous debt, highlighting its precarious economic situation.
Despite optimistic projections by Sergio Massa, Economy Minister and presidential candidate who claimed last month that an agreement was imminent within hours; finalizing terms has proven more challenging than expected due to ongoing negotiations about necessary reforms and internal disagreements within IMF regarding policy steps required from Argentina.
The IMF maintains positivity amidst these delays, stating their discussions continue constructively based on previously agreed upon core policy aspects aiming at reaching staff-level consensus. Meanwhile, no official comment came forth from Argentina's economy ministry regarding this matter.
Anticipation over this potential deal had initially sparked enthusiasm among investors, leading Argentine bonds to rally earlier this week before retreating.
Last month saw similar payments being made using special drawing rights provided by IMF, alongside Chinese yuan obtained through currency swap lines with Beijing indicating possible solutions available at hand if needed again in future circumstances
An additional fund release by the International Monetary Fund will likely offer some respite for South America's second-largest economy which is currently grappling with deepening financial issues amid looming presidential elections next month. Future negotiations concerning subsequent disbursements from IMF would then fall under the purview of new government post-elections
While immediate availability of funds post-agreement might not be assured considering board approval process timeframes coupled with the early August recess period; there remains hope among investors expecting timely payment under what can be considered 'short-term arrears'.