WASHINGTON, June 7 (Xinhua) -- Argentina's deal with the International Monetary Fund (IMF) to borrow 50 billion U.S. dollars would boost market confidence, said IMF head Christine Lagarde on Thursday.
"I am pleased that we can contribute to this effort by providing our financial support, which will bolster market confidence, allowing the authorities time to address a range of long-standing vulnerabilities," she said.
The Argentine government and the IMF staff have reached an agreement on a loan of 50 billion U.S. dollars over three years under the so-called stand-by arrangement.
"This staff-level agreement will be subject to approval by the IMF's Executive Board, which will consider Argentina's economic plan in the coming days," the IMF said in a statement.
The stand-by arrangement allows the IMF to respond quickly to member countries' external financing needs, and to support policies designed to help them emerge from crisis and restore sustainable growth, according to the IMF.
Lagarde said the IMF supports Argentine authorities' efforts to reduce fiscal deficits.
"At the core of the government's economic plan is a rebalancing of the fiscal position. We fully support this priority and welcome the authorities' intention to accelerate the pace at which they reduce the federal government's deficit, restoring the primary balance by 2020," she said.
Analysts said the IMF loan agreement would help Argentine authorities to stabilize the economy, restore investor confidence and stem a drop in the value of the Argentine peso.
Since the start of this year, Argentine's peso had devaluated a total of 32.14 percent before the end of May.
Weeks of currency devaluation has pushed the Latin American government to turn to the IMF for help. However, Argentines fearing that the negotiation will lead to harsh austerity measures have taken to the streets to oppose the authorities.
