BUENOS AIRES/WASHINGTON, Jan 28 (Reuters) - The International Monetary Fund (IMF) said on Friday its staff had reached an understanding with Argentine authorities on "key policies" underpinning talks over a new IMF-supported program to revamp over $40 billion in debt.
The Argentine government earlier said it had reached a deal with the IMF after lengthy and arduous talks to replace a record $57 billion deal from 2018 which failed to halt the South American country's slide into economic and currency crises.
"IMF staff and the Argentine authorities have agreed on the fiscal consolidation path that will form a key policy anchor of the program, the Fund said in a statement. "The agreed fiscal path would gradually and sustainably improve public finances and reduce monetary financing."
The IMF said the agreed fiscal path would allow Argentina to increase spending on infrastructure, science and technology and would protect targeted social programs. But the Fund and Argentine authorities agreed that a strategy to reduce energy subsidies "in a progressive manner" was essential to improving government spending.
The framework also calls for the altering of Argentina's monetary policy to "deliver positive real interest rates to support domestic financing and strengthen stability."
The Fund said it will work with Argentine authorities towards reaching a staff-level agreement that can be considered for approval by the IMF's executive board. (Reporting by Adam Jourdan and David Lawder Editing by Paul Simao)
