IMF board approves increased loan package worth $56bn for Argentina
What's the story
The International Monetary Fund executive board on Friday approved an increased loan package for Argentina worth $56 billion to help stabilize the crisis-battered country's economy and currency.
The country secured a $50 billion IMF loan in June, and had received $15 billion already, but as conditions worsened Buenos Aires had to go back to the lender for additional support with faster disbursement.
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Details
Despite challenges, government strengthening policy plans: IMF Managing Director
The IMF said the approval released $5.7 billion to the government immediately, but it also includes tougher conditions.
With the latest installment, the IMF has released just over $20 billion to President Mauricio Macri's government.
"Despite the challenging environment the government has proactively strengthened its policy plans," IMF Managing Director Christine Lagarde said in a statement.
Peso rate
Argentina suffered rapid loss in its currency since April
Argentina's woes were brought on by a rapid loss of confidence in its currency from April, which exacerbated the downturn already underway due to the severe drought.
The peso has lost around 50% of its value against the dollar since the start of the year, including 20% in a two-day period in August after Macri announced he was seeking to renegotiate the IMF loan.
Loan
About the three-year loan package by IMF
The beefed-up three-year IMF loan package requires government spending cuts and changes to central bank policy, including moves to choke off inflation and allowing the currency to move freely, but authorities will be able to intervene if the peso falls too steeply.
The International Monetary Fund had also stressed that the package includes a "floor" on spending for social programs.