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IMF Flags Argentina's Reserve Shortfall as Government Says Stabilization Plan Near Finish

The Fund urges tighter monetary and currency policies to build buffers before heavy January payments.

Overview

  • IMF spokesperson Julie Kozack said hitting the year-end reserve goal will be challenging and called for stricter monetary and exchange-rate policies alongside broader reforms, with the next review set to decide how a US$20 billion U.S. Treasury swap is counted.
  • Private gauges show net reserves remain negative and well below the relaxed year-end target of about US$3.3 billion, with one estimate from Consultora 1816 placing the shortfall near US$17 billion under IMF methodology.
  • Vice Economy Minister José Luis Daza said the two-year stabilization plan is about to conclude and that formalizing reserve purchases will be clarified quickly, while officials argue roughly US$30 billion was bought but used to pay cash debt maturities.
  • The central bank has not been purchasing dollars because the exchange-rate band leaves the official rate near its ceiling, which would trigger rule-based reserve sales if breached, reinforcing the priority placed on disinflation.
  • A US$4.2 billion January payment heightens pressure to define reserve accounting and financing, with markets watching potential repo funding or possible activation of the U.S. Treasury swap.