## Press Release: IMF Managing Director Issues Statement on Transitional Credit Support for Argentina

_IMF News, January 17, 2003_

## Source details

**Canonical URL:** [Press Release: IMF Managing Director Issues Statement on Transitional Credit Support for Argentina](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0306)

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## Bibliographic details
- Published: January 17, 2003

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### Executive recommendation
- Press Release No. 03/06, January 17, 2003.
- Mr. Horst Köhler, Managing Director of the International Monetary Fund (IMF), confirmed he is recommending to the IMF's 24-member Executive Board approval of transitional financial support for Argentina.
- He transmitted the Argentine authorities' letter of intent and memorandum of economic policies, which are included in the IMF staff report for the transitional program in 2003.

### Assessment of the situation
- The Article IV discussion on January 8 "demonstrated the complexity of the situation in Argentina" as staff, management and the authorities worked to secure a policy framework that:
  - "achieves durable macroeconomic stability,"
  - "supports the resumption of growth," and
  - "improves the investment climate."
- The Article IV consultation report is described as "candid in stressing that difficulties in securing a political consensus in Argentina have been a core problem impeding progress toward a program."
- Recent months: "the economic situation has somewhat stabilized, though it remains fragile."

### Purpose and design of the transitional program
- The government has developed a series of policy commitments that could, "if implemented consistently and credibly, build a bridge to a comprehensive program to be negotiated with a new government after the elections."
- Objectives of the transitional program:
  - Preserve macroeconomic stability through the course of the upcoming elections.
  - Reduce the risk of policy reversals.
  - Provide a framework for the multilateral development banks to support social programs in Argentina, "which are key to protect the vulnerable groups from the adverse effects of the crisis."

### Risks and Board considerations
- The transitional program "involves exceptional risks to the Fund which are outlined with appropriate care and depth in the staff report."
- Identified risk factors:
  - "the fragility of the macroeconomic policy framework"
  - "the political challenges to implementation"
- The Board is urged to "weigh these risks carefully, and their implications for Argentina, the region, and for the Fund itself."

### Decision rationale and appeal
- Mr. Köhler: "I have decided to recommend the approval of this arrangement as a demonstration of a good faith effort of the international community in favor of the people of Argentina."
- Assurance to the Argentine people: "the Fund will do its part to make this program succeed."
- Emphasis on domestic responsibility: "The key to a durable solution to the present difficulties lies, of course, in the actions that Argentina takes."
- Hope expressed that the Fund's contribution "will catalyze a cohesive effort on the part of the Argentine authorities, the provinces, legislators and civil society to fully implement this transitional program."

*Press Release No. 03/06, January 17, 2003.*

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## References

- [Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0306_