Argentina is engaged in discussions with the International Monetary Fund (IMF) regarding a potential new financing program, revealed U.S. Treasury Secretary Janet Yellen following her meeting with Economy Minister Luis Caputo.

Yellen expressed optimism after her first encounter with Caputo, commending the willingness of Argentina’s new libertarian government to confront the country’s economic challenges with promising measures.

Under President Javier Milei’s leadership, the administration is committed to implementing stringent austerity measures aimed at addressing Argentina’s ongoing crisis. While these measures have garnered a positive reception from markets and investors, they have also sparked tensions with labor unions and regional leaders.

Caputo clarified that although immediate negotiations for a new IMF loan program were not underway, ongoing discussions with the global lender were aimed at resolving Argentina’s fiscal issues.

The previous $44 billion loan program faltered amidst mounting inflation and fiscal deficits, prompting discussions to overhaul the existing agreement.

Yellen acknowledged Argentina’s tumultuous financial history, expressing cautious optimism that the government’s proposed reforms could mark a turning point for the nation. She praised Milei’s administration for taking significant strides toward achieving fiscal sustainability, implementing currency adjustments, and combating inflation.

Despite the challenges ahead, Yellen reiterated her support for Argentina’s reform efforts, emphasizing the importance of ongoing collaboration between the government and international financial institutions.