By Kanishka Singh and David Lawder
WASHINGTON (Reuters) -The International Monetary Fund (IMF) board on Thursday cleared the way for Argentina to draw $800 million to help drive its economic recovery, saying the lending program was "firmly on track".
Argentina has a $44 billion program with the IMF, which includes economic targets on growth, inflation and reserves. The IMF said in a statement its executive board had completed the eighth review of that extended fund facility arrangement.
"In completing the review, the Executive Board assessed the program to be firmly on track, with all quantitative performance criteria through end-March 2024 met with margins," the IMF said.
Sustaining the progress will require improving the quality of fiscal adjustment, taking steps towards enhanced monetary and foreign exchange policy framework, and implementing reforms for growth, it said.
Argentina's government has said it will open talks with the IMF over a new program.
The IMF's approval comes after President Javier Milei, who took office in December, put in place sweeping fiscal reforms and sharply tightened government spending to tackle triple-digit inflation, a shrinking economy and reserves in the red.
The changes under him have helped Argentina rebuild depleted foreign currency reserves, post fiscal surpluses at the start of the year and stabilize the peso currency.
Argentina's monthly inflation rate in May was the lowest since 2022, official data showed on Thursday, cooling for the fifth straight month to 4.2% amid the austerity drive by libertarian Milei.
Still, the government faces a challenge with the economy stalling and poverty levels rising. Continued efforts to support the vulnerable, broaden political support and ensure "agile" policymaking will be necessary in Argentina going forward, the IMF said.