Argentina's peso plummeted to a new low Monday despite government attempts to curb losses in recent weeks by hiking interest rates and shedding billions in foreign reserves.
Argentina's peso snapped its losing streak on Tuesday, closing 3.73 percent stronger at 24.10 per USA dollar after the central bank sold reserves but before the government reported 12-month inflation at a dizzying 25.5 percent. However under the latest raft of measures financial institution are only allowed to hold 10% reserves in USA dollars.
Al Jazeera's Teresa Bo reports from Buenos Aires. The amount and terms of the loan will still have to be discussed.
"IMF staff are continuing discussions with the Argentine authorities toward a Fund-supported program".
For a while now, the U.S. Federal Reserve has been well ahead of other systemically important central banks in normalizing monetary policy - that is, raising interest rates, eliminating large-scale asset purchases, and starting the multi-year process of shrinking its balance sheet.
Argentina is seeking a high access "stand by" financing arrangement that would provide funds above the normal loan amount.
As US interest rates rise, investors in recent weeks have been fleeing developing countries and in the particular case of a vulnerable Argentina, driving up demand for US dollars, and driving the Peso down.
Argentine media reports say the government needs at least $30 billion from the International Monetary Fund, with extra support from the World Bank and the Inter-American Development Bank.
The central bank increased interest rates on its short-term "Lebac" securities to 40 percent from 26.3 percent in its monthly auction, it said on Tuesday.
After taking office in December 2015, the market-friendly Macri floated the Argentine peso, ending the strict controls in place under the government of Cristina Kirchner.
The country has been plagued by years of high inflation and unemployment - problems an austerity drive has struggled to contain.
The IMF negotiations carry political risks for President Mauricio Macri, in a country where many blame IMF-backed policies for a 2001-2002 economic meltdown. Some opposition politicians and activists have voiced concerns that the deal being drawn up in Washington will require painful fiscal belt tightening.
According to pollsters CEOP, Macri has only 37 percent support among Argentines, the lowest ranking of his presidency.