By Kanjyik Ghosh and Brendan O'Boyle
April 15 (Reuters) - Argentina reached a staff-level agreement with the International Monetary Fund on the second review of its $20 billion program, the IMF said on Wednesday, unlocking the disbursement of $1 billion, subject to approval by the IMF Executive Board.
"Reform momentum has significantly strengthened in recent months," the IMF said in a statement, recognizing greater political support in South America's second-largest economy for key reforms, as well
as improvements to monetary and FX policy that have helped it begin to accumulate critical foreign reserves.
Argentina sealed the $20 billion, 48-month deal a year ago - its 23rd deal with the Washington-based lender - in order to help roll over an earlier $44 billion deal and give the government of libertarian Javier Milei financial firepower to undo capital controls.
Markets have since closely tracked the government's ability to restore its depleted foreign reserves, a key requirement under the deal. When approving its first review last July, the IMF lowered the bar for the reserve accumulation targets through 2026 after the country failed to meet the deal's initial target.
In recent months, however, the IMF has applauded the Argentine central bank's daily purchases of foreign currency to meet Argentina's debt obligations and rebuild its reserve buffers.
In 2026, Argentina's central bank has accumulated over $5.5 billion in purchases, although its reserves remain smaller because of ongoing debt payments.
(Reporting by Kanjyik Ghosh in Barcelona; Writing by Brendan O'Boyle, Editing by Natalia Siniawski)
