Argentina Seeks to Reach IMF Staff-Level Agreement Before March

(Bloomberg) -- Argentina's government expects to reach a staff-level agreement on a new program with the International Monetary Fund in the next three to four weeks before sending it to congress for approval, even amid criticism from within the ruling coalition.

The government is working to finalize the technical and legal documents necessary to reach that first requirement before March, according to officials in the Alberto Fernandez administration, who asked not to be named because talks are private. The timeline remains even after a setback Monday, when the ruling coalition's leader in the lower house, Maximo Kirchner, resigned from that role in protest over the negotiations.

A staff-level agreement, which will set out the explicit targets and commitments that the Fund's technical staff agree to with Economy Ministry officials, is the next step in talks between the two parts. The country announced last week an initial understanding for a deal worth $44.5 billion as part of efforts to stabilize the economy and refinance an existing loan. The staff-level deal will then need to be approved by Argentina's congress and, ultimately, by the IMF's board of directors.

The stakes are high for Argentina, as its foreign reserves dwindle and a March $2.8 billion deadline for a payment approaches. The country made a $717 million payment due to the IMF on Friday and has to pay over $350 million in early February.

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Once the government is ready to send the agreement to congress for discussion, the bill will include projections such as government spending and central bank money transfers to the Treasury up until 2024, said one of the officials. The staff agreement with the Fund will include projections going further, and both parts have found consensus on the need to reach a balanced primary budget by 2025, the person added.

If the deal goes through all its upcoming approval hurdles, Argentina must then meet the targets in the program and pass quarterly reviews with IMF staff in order to keep receiving the disbursements.