(Adds details on statement, reaction)
BUENOS AIRES, May 18 (Reuters) - Argentine authorities are requesting financing from the International Monetary Fund in the form of an exceptional access standby arrangement, IMF Managing Director Christine Lagarde told the fund’s board on Friday.
An exceptional access program is an IMF financing program worth anything above 145 percent of a country’s IMF quota per year or 435 percent over the life of the program.
Given Argentina’s $4.5 billion IMF quota, which is the value of a country’s shares in the IMF financing system, the minimum value of the financing would be $19.7 billion or at least $6.75 billion per year.
Argentina’s government requested IMF assistance on May 8 after a run on the peso currency. It was a politically risky move for President Mauricio Macri because many Argentines blame the IMF for a 2001 crisis that left millions in poverty.
Macri’s government is trying to lower its fiscal deficit and control double-digit inflation. The IMF “fully endorses” Argentina’s economic goals, Lagarde said in a statement.
She said Argentina had faced volatility as global financial conditions have tightened and as a drought hurt soy and corn export crops.
Macri was elected in late 2015 pledging to bring Argentina back into the global financial system following more than a decade of leftist populism. The need to build and maintain social consensus for the reforms carried “certain vulnerabilities,” Lagarde said in the statement.
The peso closed down 0.37 percent to 24.43 per U.S. dollar on Friday. It weakened 4.42 percent this week and is down more than 15 percent from the beginning of the month.
“To me (Lagarde’s statement) says they are doing everything they can to minimize the political risk to Macri for doing this and to help as much as possible to allow him to continue with a somewhat accelerated, gradual approach” said Alberto Bernal, chief strategist at XP investments in Miami. (Reporting by Caroline Stauffer, Rodrigo Campos and Maximiliano Rizzi; Editing by Bernadette Baum and Chizu Nomiyama)