WASHINGTON: Argentina is set to receive a much-needed disbursement of funds from the IMF, the lender said Friday, with a fresh staff-level agreement paving the way for access to $7.5 billion.

The aim is to “support Argentina’s policy efforts and near-term balance of payments needs,” as the country grapples with a tough economic backdrop, the International Monetary Fund said in a statement.

The latest deal, which is subject to approval by the IMF executive board, could help keep the South American nation afloat while its presidential race is underway – with the winner of the election to take office in December.

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“Argentina’s economic situation has become very challenging,” the fund said. “Key program targets through end-June were missed on account of the larger-than-anticipated impact of the drought, as well as policy slippages and delays.”

The expected release of funds comes under part of an earlier 30-month arrangement, approved in March 2022, totaling $44 billion.

The recent discussions “focused on reaching agreement on a policy package to rebuild reserves and enhance fiscal order,” said the IMF statement.

The fund added that “safeguarding stability and addressing underlying imbalances – high inflation and low reserve coverage – are fundamental to secure a more sustainable, resilient, and inclusive growth over the medium term.”

Argentina is the target of the largest IMF assistance program as it grapples with annual inflation exceeding 100 percent, a severe shortage of foreign exchange and a poverty level of about 40 percent.