The disbursement of $5.4 billion (or roughly €4.97 billion) to Argentina as part of a $44 billion loan program to the Latin American country struggling with a failing economy was authorized late on Friday by the executive board of the International Monetary Fund.
The Extended Fund Facility (EFF) for Argentina has paid a total of about $28.9 billion to date, according to a brief statement from the IMF. The IMF’s largest EFF assistance initiative is presently being implemented in Argentina.
Over the years, the faltering economy of Argentina has not considerably stabilized.
Fitch Ratings lowered the nation’s foreign currency debt last week. The ratings agency says that because it is currently one step above default, a default is “imminent.”
According to Fitch, it was responding to a contentious government order that sought to compel local public sector organizations to convert their debt from foreign currencies to Argentine peso-denominated debt. Given that the dollar worth of the credit would no longer be guaranteed, this, according to Fitch, would be equivalent to an effective default under its standards.
Three times this century and nine times since gaining independence from Spain in 1816, Argentina has defaulted on its debt, with the largest default occurring in late 2001.
Despite the nation’s approximately 5% economic growth in 2022, inflation was out of control, at about 95% year over year. That is almost ten times higher than the 10% peaks seen in Western countries in 2022 during a period of high inflation.