Press Release No. 04/2

Press Release: IMF Managing Director to Recommend to Executive Board the Letter of Intent of the Authorities for the First Review of the Stand-By Arrangement with Argentina

January 9, 2004

Mr. Horst Köhler, Managing Director of the International Monetary Fund (IMF), today made the following announcement:

"Progress has been made in recent days and understandings have been reached with the Argentine authorities on a letter of intent requesting the completion of the first program and financing assurances reviews under the three-year Stand-By Arrangement with the Fund. I plan shortly to recommend to the IMF Executive Board the completion of these reviews. The authorities' letter has been signed today in Buenos Aires and will be sent to the IMF Board shortly. I anticipate an Executive Board meeting later this month.

"The authorities' letter notes the considerable progress made in implementing the economic program that has been supported by a Stand-By Arrangement with the IMF since September 2003.

"In particular, macroeconomic developments continue to be favorable, the economic recovery in 2003 has exceeded the target in the program, and monetary and fiscal policy implementation remains in line with the program's commitments, with quantitative performance criteria for end-October 2003 met with comfortable margins. Moreover, important measures requiring Congressional approval have now been implemented, including the 2004 budget that underpins a consolidated primary surplus of 3 percent of GDP; a comprehensive anti-tax evasion package; and legislation facilitating the renegotiation of utility concessions. Considerable further progress has also been made toward eliminating quasi-monies.

"The letter of intent for the first review, in addition, develops further the authorities' strategy for strengthening the banking system and making progress in private corporate debt restructuring, among other areas of structural reform. Finally, the authorities reiterate in their letter their determination to complete a public debt restructuring that attracts broad creditor support."