Argentina: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Waivers of Applicability and Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina

IMF Staff Country Reports, October 7, 2022

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Canonical URL: Argentina: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Waivers of Applicability and Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina

Episodes of domestic policy uncertainty and acute market pressures in mid- 2022, coupled with a more challenging global environment, necessitated firmer program implementation and stronger policy reaction to ensure macroeconomic stability, rebuild policy credibility, and safeguard program objectives.
Initial decisive actions and strengthened commitments by the new economic team since early-August have started to stabilized markets, although the situation is fragile as reserve coverage remains low while inflation is unanchored and stands at multi-year highs.
The review discussions focused on assessing recent progress, updating the macroeconomic framework, and reaching understandings on a solid policy package to durably restore stability and achieve the program objectives.

Macroeconomic stability: emphasis on firmer program implementation and stronger policy reaction to address domestic uncertainty and global headwinds.
Policy credibility: rebuilding credibility through decisive actions and strengthened commitments by the economic team.
Reserve and inflation dynamics: attention to low reserve coverage and unanchored inflation at multi-year highs.
Program objectives: safeguard and durably restore stability to achieve the Extended Fund Facility program objectives.

Subject: Central banks; Foreign exchange; Government debt management; Inflation; International organization; International reserves; Monetary policy; Prices; Public debt; Public financial management (PFM)
Keywords: central bank financing; financing of the federal government; Global; Government debt management; Inflation; International reserves; NDF market; non-deliverable futures; policy credibility