Argentina reached tentative agreement Tuesday with the International Monetary Fund on a series of measures designed to repair its flagging economic restructuring program and enable it to resume borrowing money from the 151-country organization.
The measures, which still must be approved formally by the IMF's executive board, will permit Argentina to borrow about $380 million from the IMF in late March, thus resuming installments on a $1.4-billion IMF loan it negotiated last summer. The loan was suspended because Argentina failed to meet some of its economic targets.
Argentina is also expected to qualify for a companion loan of about $160 million from the World Bank that also will be conditioned on an agreement by the Argentine government to take additional steps to streamline its economy.
In the meantime, the United States announced that it will provide Buenos Aires with a temporary loan of $550 million to tide the country over until it receives the IMF and World Bank money in three weeks.
Although Argentina has kept current in its loan repayments to banks, it must make payments to domestic bondholders later this month and must replenish its foreign reserves, which have dwindled to dangerously low levels.
The tentative accord smoothes over what could have resulted in a major problem in managing the global debt problem. Strapped by economic difficulties, Argentina has been rapidly running out of cash, and the government has faced pressure to delay payments on some of its foreign debt.
The new agreement includes promises by the Buenos Aires government to tighten its economy in several areas, including reducing spending further and raising revenue. The Argentine Congress approved a tax increase a few weeks ago.