The International Monetary Fund’s executive board approved a $5.4 billion disbursement to Argentina, a key step forward in the government’s program that has faced setbacks amid a worsening economic outlook.
Downside risks to the country’s economic outlook have increased, warranting a need for more central-bank rate increases “in the event of further inflation shocks” or currency pressures, IMF First Deputy Managing Director Gita Gopinath said Saturday. Argentina needs a “stronger policy package,” including potential changes to currency policies, she said in a statement.
Argentina controls the official peso exchange rate through a cobweb of currency controls and capital restrictions. Gopinath didn’t specify which policy changes might be needed.
