Argentina clinches extra $7 bln in IMF funds

REUTERS - Argentina on Wednesday (September 26) clinched an additional $7 billion in funding from the International Monetary Fund in an effort to ease investor concerns over its abilities to pay its debts. IMF Managing Director Christine Lagarde, speaking at a news conference in New York alongside Argentine Economy Minister Nicolas Dujovne, said the Fund would increase its lending programme with Argentina to a total of $57 billion, with "significant frontloading" of the disbursements until the end of next year. Lagarde said that Argentina's central bank had agreed as part of the deal to allow the peso currency to float freely and would only intervene in the foreign exchange market in extreme circumstances. The Argentine currency has shed more than 50 percent of its value so far this year, as a drought hit its agricultural exports and tipped the economy into recession, raising fears over the government's ability to service its foreign debts next year. The central bank has spent nearly $16 billion in reserves this year in a failed attempt to prop up the peso. In an effort to ease investors concerns over the Argentina's ability to pay its foreign debts, Lagarde said that the new deal would increase funding by $19 billion in 2019. Disbursements for the rest of this year would rise to $13.4 billion from $6 billion under the existing deal, she said. Subject to IMF board approval, financing under the new deal would no longer be discretionary, but would be readily available to the government, Lagarde said.