{
  "title": "Press Release: IMF Approves US$12.55 Billion Three-Year Stand-By Credit for Argentina",
  "publication": "IMF News, September 20, 2003",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr03160",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr03160",
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  "summary": "The Executive Board of the International Monetary Fund approved a three-year, SDR 8.98 billion (about US$12.55 billion) Stand-By Credit Arrangement for Argentina to succeed the arrangement that expired on August 31, 2003 (Press Release No. 03/09).",
  "authors": [
    "Credit Arrangement"
  ],
  "publishDate": "2003-09-20",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The Executive Board of the International Monetary Fund approved a three-year, SDR 8.98 billion (about US$12.55 billion) Stand-By Credit Arrangement for Argentina to succeed the arrangement that expired on August 31, 2003 (Press Release No. 03/09).\n- The Executive Board also approved the authorities' request for an extension of repayment expectations to an obligations schedule in an aggregate amount equivalent to SDR 1.74 billion (about US$2.43 billion).\n- The Board discussion took place in Dubai, United Arab Emirates, ahead of the 2003 joint World Bank-IMF Annual Meetings.\n- The IMF emphasized that decisive policy actions and strong policy ownership by Argentine authorities are crucial to minimize program risks."
    },
    {
      "heading": "Program objectives and pillars",
      "content": "- Principal objectives:\n  - Restore sustained growth.\n  - Improve poverty and equity indicators.\n  - Ensure debt sustainability and normalize relations with creditors.\n- Three fundamental elements of the medium-term program:\n  - 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.\n  - A strategy to assure the strength of the banking system and facilitate the increase in bank lending essential to support the recovery.\n  - Institutional reforms to facilitate corporate debt restructuring, address issues of the utility companies, and improve the investment climate."
    },
    {
      "heading": "Growth and inflation projections",
      "content": "- GDP growth targets:\n  - 5.5 percent in 2003.\n  - Around 4 percent in 2004-06.\n- Inflation:\n  - Core inflation is expected to be maintained in single digits.\n  - Monetary program aims to anchor inflation expectations in the single digit range."
    },
    {
      "heading": "Fiscal framework and commitments",
      "content": "- Primary surplus targets and commitments:\n  - Raise the consolidated primary surplus from 2½ percent of GDP in 2003 to 3 percent in 2004.\n  - Authorities committed to primary surpluses in subsequent years sufficient to ensure a sustainable fiscal position and to cover net payments on performing debt and obligations that may result under a debt restructuring agreement.\n- Structural fiscal reforms:\n  - Undertake further tax reform and secure early consensus on reforming intergovernmental relations.\n  - Commitments to submit tax reform and intergovernmental reform legislation to Congress during 2004, with a view to their being introduced in the context of the 2005 budget.\n- Sequencing:\n  - Reforms are sequenced to build consensus and to be carried to a decisive stage in 2004."
    },
    {
      "heading": "Monetary policy and banking reforms",
      "content": "- Monetary policy:\n  - Continue to entrench low inflation expectations, with base money growth driven mainly by the accumulation of international reserves.\n  - Authorities consider moving to an inflation targeting regime by end-2004.\n  - Supportive reforms aimed at increasing the autonomy of the central bank, including studying proposals for enhancing the central bank's independence and moving to an inflation-targeting framework by end-2004.\n- Banking strategy and commitments:\n  - Implement a comprehensive banking restructuring strategy to entrench broad price stability and facilitate lending.\n  - Commit to bring the regulatory and supervisory framework to international standards.\n  - Foster restructuring and recapitalization of public and private banks.\n  - Implement compensating measures to offset the impact of official sector actions on banks' balance sheets.\n  - By end-2003, eliminate temporary forbearance on the classification and provisioning of private loans and compensate banks for asymmetric pesoization and asymmetric indexation.\n  - Assess the impact of losses experienced by banks because of legal injunctions (amparos) and identify measures to strengthen the system by end of 2003."
    },
    {
      "heading": "Debt restructuring, utilities, and legal framework",
      "content": "- Debt restructuring:\n  - Authorities committed to advance negotiations with external creditors consistent with medium-term sustainability.\n  - Aim to conclude negotiations by mid-2004.\n- Utility sector:\n  - Aim to obtain congressional approval by end-2003 of new legislation delegating powers to the executive branch to renegotiate public concessions and effect interim tariff increases.\n- Predictable legal framework:\n  - Commit to review the effectiveness of the insolvency system to put in place a legal and regulatory framework conducive to progress in private corporate debt restructuring.\n- Fund view:\n  - Early conclusion of a sustainable restructuring agreement, paving the way for Argentina to return to capital markets, is fundamental to the success of the program."
    },
    {
      "heading": "Risks and implementation",
      "content": "- Recognized risks:\n  - Key elements of fiscal and banking reforms crucial to sustainability will only be formulated at a later stage.\n- Conditionalities for minimizing risks:\n  - Decisive policy actions by Argentine authorities.\n  - Strong policy ownership.\n  - Progress on normalizing relations with creditors."
    },
    {
      "heading": "Key statistics and institutional facts",
      "content": "- Stand-By Credit Arrangement:\n  - SDR 8.98 billion (about US$12.55 billion) for three years.\n- Extension of repayment expectations:\n  - SDR 1.74 billion (about US$2.43 billion).\n- Argentina IMF membership and quota:\n  - Argentina joined the IMF on September 20,1956.\n  - Quota is SDR 2.117 billion (about US$2.959 billion).\n  - Outstanding use of IMF credit currently totals SDR 8.85 billion (about US$12.37 billion).\n\nPress Release No. 03/160 — September 20, 2003 — International Monetary Fund\n\n---\n\n\n References\n\n- Argentina and the IMF\n- Press Releases\n- PRESS CENTER\n- Press Release No. 03/09\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr03160"
    }
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    "Authors: Credit Arrangement",
    "Published: September 20, 2003",
    "The Executive Board of the International Monetary Fund approved a three-year, SDR 8.98 billion (about US$12.55 billion) Stand-By Credit Arrangement for Argentina to succeed the arrangement that expired on August 31, 2003 (Press Release No. 03/09).",
    "The Executive Board also approved the authorities' request for an extension of repayment expectations to an obligations schedule in an aggregate amount equivalent to SDR 1.74 billion (about US$2.43 billion).",
    "The Board discussion took place in Dubai, United Arab Emirates, ahead of the 2003 joint World Bank-IMF Annual Meetings.",
    "The IMF emphasized that decisive policy actions and strong policy ownership by Argentine authorities are crucial to minimize program risks.",
    "Principal objectives:",
    "Three fundamental elements of the medium-term program:",
    "GDP growth targets:",
    "Inflation:",
    "Primary surplus targets and commitments:",
    "Structural fiscal reforms:",
    "Sequencing:",
    "Monetary policy:",
    "Banking strategy and commitments:",
    "Debt restructuring:",
    "Utility sector:",
    "Predictable legal framework:",
    "Fund view:",
    "Recognized risks:",
    "Conditionalities for minimizing risks:",
    "Stand-By Credit Arrangement:",
    "Extension of repayment expectations:",
    "Argentina IMF membership and quota:",
    "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 03/09](https://www.imf.org/external/np/sec/pr/2003/pr0309.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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