Imf: Caputo Met With Gita Gopinath to Finalize a New Agreement

The Minister of Economy, Luis Caputo, and the President of the Central Bank, Santiago Bausili, held a virtual meeting this Friday with the Deputy Director of the IMF, Gita Gopinath, as part of the negotiations for a new financing program to strengthen the BCRA's reserves.

This meeting adds to the conversations that President Javier Milei recently held with the organization's director, Kristalina Georgieva, and with the U.S. Treasury Secretary, Scott Bessent, reflecting the progress of the efforts to close the agreement in the coming weeks.

IMF: "Very positive progress" in negotiations

After the meeting, Gopinath highlighted the progress of the negotiations. "Very positive progress is being made in the negotiations for a new program supported by the Fund to continue improving stability and growth in Argentina," she stated.

Meanwhile, Caputo replied with a brief "Thank you, Gita and team," reflecting the good rapport with the organization. While the minister was in Buenos Aires, Bausili participated in the meeting from Cape Town, South Africa, where he attended the G20 Finance Ministers and Central Bank Governors summit.

Key details of the new agreement

The government seeks to close the new financial program in the coming weeks, although critical details still need to be defined, such as the total amount of financing, the sequence of disbursements, and the conditions of the agreement. Among the points under discussion are:

• Exchange rate scheme: The evolution of the crawling peg, the operation of the dollar blend (which allows 20% to be settled at the CCL), and possible relaxations of the currency controls will be defined.
• Destination of the funds: The IMF dollars would be used to cancel Non-Transferable Letters held by the BCRA, converting intra-public sector debt into a liability with the organization.
• Amounts and terms: Milei mentioned financing of USD 11 billion, although the figure was not confirmed by the negotiators.
• Fiscal adjustment conditions: The IMF has already suggested that the adjustment profile could change in 2025 to ensure its sustainability.

Need for fresh funds and market expectations

The rush to close the agreement is due to the decline in international reserves, which persists despite the Central Bank's daily purchases. According to market analysts, this is mainly due to the payment of dollar-denominated debt.

The IMF had praised the progress of Milei's economic plan, but urged to accelerate the recovery of reserves and to plan a sustainable long-term fiscal adjustment. As negotiations progress, markets will be alert to official announcements and the definition of the new exchange rate scheme post-agreement.