BUENOS AIRES (Reuters) - The International Monetary Fund has held productive meetings with Argentina aimed at revamping the country's standby loan agreement, the IMF said on Monday, while the government prepares to send its 2019 budget bill to Congress.
The measure is expected to include new spending cuts aimed at erasing Argentina's primary fiscal deficit next year. In June the government signed a $50 billion standby deal that included a fiscal shortfall of 1.3 percent of gross domestic product.
But the IMF backing was not enough to halt a run on the peso, which has erased more than one-half of the currency's value against the U.S. dollar so far this year.
"Important progress is being made toward strengthening Argentina's economic policy plan, supported by a stand-by arrangement with the IMF. We are working hard to conclude these staff-level talks in short order and present a proposal to the IMF executive board," the IMF said in a statement.
The peso closed little changed at 39.87 to the greenback on Friday, marking a 7.25 percent loss for the week.
Fiscal belt-tightening items included in the budget bill, expected to be unveiled later on Monday, will not be easy for President Mauricio Macri to implement ahead of his expected 2019 re-election bid.
Teachers, students and public sector workers blocked streets in the capital last week in protest of the cuts.
Marchers rushed Congress late last year while lawmakers debated public pension cuts, prompting authorities to use teargas and water cannon to hold protesters back.
(Reporting by Eliana Raszewski; Writing by Hugh Bronstein; Editing by Chizu Nomiyama and Jeffrey Benkoe)
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