Buenos Aires, Argentina – Wall Street is growing increasingly optimistic about a potential deal between Argentina and the International Monetary Fund (IMF), according to a report in Argentina's Clarín newspaper.
Major Wall Street banks and former IMF officials believe Argentina could secure a new four-year loan of up to $10 billion. This funding is expected to be used to eliminate foreign exchange controls and unify the official and informal exchange rates, leading to a potential 30% devaluation of the Argentine peso.
Bank of America (BofA) stated in a report titled "IMF Agreement: Key to External Debt Servicing" that Argentina and the IMF are likely to reach an agreement on an Extended Credit Facility (EFF) program by April. This deal would involve an initial injection of significant new funds and adjustments to Argentina's existing debt obligations to the IMF.
BofA forecasts that the Argentine government, which faces a significant external debt burden (60%) and low net international reserves (-$5.7 billion), will need to implement more substantial fiscal adjustments and a more flexible exchange rate policy in the medium term to address its short-term liquidity issues.
Praising the Javier Milei administration's inflation and fiscal tightening policies, BofA expressed a positive outlook for Argentina, stating, "We have an overweight view on Argentina in our core Latin America portfolio, with a focus on the banking and energy sectors."
BofA anticipates that an IMF-Argentina agreement could be approved by the Argentine Congress in April. The initial disbursement of new funds is projected to be between $50 billion and $100 billion. However, given Argentina's status as the IMF's largest debtor and the substantial debt repayments due starting in late 2026, a portion of the new loan will likely be used to service existing IMF debt, potentially bringing the total package to $200 billion.
An IMF delegation that visited Argentina last week concluded its mission on Monday without releasing an official statement. However, local media reported that the Argentine government described the visit as "very constructive."
While the two sides reportedly reached agreement on most issues, they appeared to have some differences on foreign exchange policy.
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