Development bank gives Argentina bridge loan to pay IMF debt

Development bank gives Argentina bridge loan to pay IMF debt

The Development Bank of Latin America and the Caribbean (CAF) has approved a $960 million loan for Argentina aimed at helping the government meet debt obligations with the International Monetary Fund (IMF), the bank said in a statement on Friday.

Reuters reported on Thursday that Argentina was set to receive CAF financing to make a $913 million payment due to the IMF next week.

The South American country is the fund's largest debtor with its $44 billion program, and the new government of libertarian President Javier Milei is now tasked with getting the program back on track and improving the ailing economy.

Argentina is battling triple-digit annual inflation, an economic recession and a growing poverty rate.

Milei's office described the loan as its "first great achievement" in all-capital letters in a post on social media network X. "Getting Argentina's finances in order allowed the country to access CAF financing and avoid default with the IMF."

The country's economy ministry rolled out a slew of "shock" reforms earlier this week. The plan included a devaluation of the peso currency by more than 50%, which took effect on Wednesday, as well as wide-ranging plans to cut state spending.

Argentina has previously had to use a swapline with China's central bank as well as a loan from Qatar to make recent payments to the international lender on time.