The Argentine government and the International Monetary Fund (IMF) announced on Sunday that they have reached a preliminary agreement regarding the repayment terms of Argentina's $44 billion debt.

In a joint statement posted on their respective Twitter accounts, the Argentine Ministry of Economy, the Central Bank, and the IMF stated that they have finalized the key aspects of the technical work concerning the upcoming review.

The parties have agreed on "the main objectives and criteria that will form the basis of an agreement at the institutional level, allowing for the expected final formulation in the coming days for Argentina's program review."

Both sides clarified that the agreement aims to strengthen the financial system and enhance reserves, taking into account the severe impact of the drought and damages to the country's exports and tax revenues.

On July 16th, an Argentine delegation traveled to Washington to negotiate with the IMF, seeking to ease the conditions of the agreement reached in 2022 with the IMF for refinancing the country's massive debts and securing the expected disbursements.

Argentina, which holds presidential and legislative elections in October, failed to meet its targets of accumulating foreign currency reserves and reducing the fiscal deficit for the first and second quarters of this year.

As a result, on June 30th, with a sharp decline in cash reserves, Argentina resorted to "Special Drawing Rights," assets created by the IMF to support countries' official reserves. The country used these assets to make a $2.7 billion payment to the IMF, part of which was in Chinese yuan due to the shortage of US dollars.

Argentina still has to pay $2.5 billion to the IMF on July 31st.

The country is facing chronic shortages of foreign currencies, especially the US dollar, and is seeking an agreement to make its repayment plan more flexible.

In April, the South American nation announced it would use the yuan to pay for Chinese imports instead of the US dollar to preserve its reserves after a currency swap agreement with Beijing.

With an annual inflation rate exceeding 100%, Argentina is preparing for general elections this year, which usually exacerbates economic and financial instability.

As negotiations with the IMF continue, it is expected that President Alberto Fernandez's government will announce measures to revive agricultural exports, the country's main source of foreign currency, along with tax measures related to imports and large corporations.

In early 2022, the IMF and Argentina, the third-largest economy in Latin America, reached an agreement to reschedule a massive debt of $44 billion, remaining from a $57 billion loan granted in 2018 during the presidency of Mauricio Macri, the largest loan ever provided by the institution.