Press Release: IMF Managing Director Issues Statement of Support for Argentina's New Medium-term Program

September 10, 2003

Mr. Horst Köhler, Managing Director of the International Monetary Fund (IMF) today made the following announcement:

"I am pleased to welcome President Kirchner's announcement of Argentina's economic program that aims at restoring strong economic growth and reducing poverty. President Kirchner has assured me of his full backing of the program and its implementation. I assured him the Fund would work hard to help Argentina achieve its aspirations.

"The authorities have prepared a letter of intent setting forth their program and have requested a new arrangement with the Fund. The arrangement, of about US$12.5 billion, is to be disbursed over 3 years, in accordance with the IMF's usual procedures. Taking into account Argentina's scheduled repayments to the IMF over this period, the IMF's net exposure to Argentina at the end of the program will be unchanged.

"Once Argentina's arrears to the Fund are cleared, I plan to recommend to the IMF Executive Board the approval of this arrangement. The authorities' letter of intent has been signed in Buenos Aires and will be sent to the IMF Executive Board shortly, for a Board meeting at the end of next week.

"Argentina's economic program has three fundamental elements:

"First, a medium-term fiscal framework to meet growth, employment, and social equity objectives, while providing a sound basis for normalizing relations with all creditors and ensuring debt sustainability.

"Second, a strategy to assure the strength of the banking system and facilitate the increase in bank lending that is essential to support the recovery.

"Third, institutional reforms to ease corporate debt restructuring, address issues of the utility companies, and fundamentally improve the investment climate.

"These and other reforms in the authorities' program are carefully sequenced for elaboration and implementation over the next three years, and it goes without saying that the success of the program will depend upon the consistency and rigor with which it is implemented."


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