The International Monetary Fund executive board on Friday approved an increased loan package for Argentina worth USD 56 billion to help stabilize the crisis-battered country's economy and currency.
The IMF said the approval released USD 5.7 billion to the government immediately, but it also includes tougher conditions.
The country secured a USD 50 billion IMF loan in June, and had received USD 15 billion already, but as conditions worsened Buenos Aires had to go back to the lender for additional support with faster disbursement.
With the latest installment, the IMF has released just over USD 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.
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 per cent of its value against the dollar since the start of the year, including 20 per cent in a two-day period in August after Macri announced he was seeking to renegotiate the IMF loan.
The beefed up three-year 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 to steeply.
Macri has introduced hugely unpopular austerity measures, including halving the number of government ministries and restoring taxes on grain exports.
The IMF stressed that the package includes a "floor" on spending for social programs.
"Protecting the most vulnerable in Argentina continues to be a central component," and the government would "increase in spending on social assistance programs in the event that social conditions deteriorate," the IMF said.
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