South American nation, which has been plagued by chronic economic problems, reached IMF deal for $50bn loan in June.

The executive board of the International Monetary Fund (IMF) has approved a $56bn loan package for Argentina to help stabilise the crisis-battered country’s economy.

The Washington-based body said on Friday that the approval released $5.7bn to the government of President Mauricio Macri immediately.

In June, Argentina declared it had reached an agreement with the IMF for a three-year, $50bn standby lending arrangement.

The deal was aimed at providing breathing space for Macri’s government and reassuring investors in the face of growing concerns over a plunging currency and gaping fiscal deficit as well as skyrocketing inflation and pressing debt obligations.

But Buenos Aires, which has already received $15bn, had to go back to the lender for additional support with faster disbursement.

With the latest instalment, the IMF has released just over $20bn to Macri’s government.

Argentina’s economic woes were brought on by a rapid loss of confidence in its currency from April.

The peso has lost around 50 percent of its value against the dollar since the start of the year, including 20 percent in a two-day period in August after Macri announced he was seeking to renegotiate the IMF loan.

He has since introduced a number of “emergency” measures, including cutting the number of government ministries by half and raising export taxes.

Austerity budget

The IMF loan announcement came a day after Argentina’s lower house of Congress passed an unpopular austerity budget, which now goes to the Senate where it is expected to win final approval.

The final pre-dawn vote came after a marathon, rancorous debate and a day of unrest that saw police fire tear gas and rubber bullets at demonstrators throwing rocks outside the legislature to protest against a bitter cocktail of tax increases and spending cuts.

Macri has pledged to enact a swathe of cuts in health, education, science, transportation, public works and culture to the tune of $10bn.

The belt-tightening measures have seen Argentinians, many of whom blame the IMF’s policies for a devastating economic collapse in the early 2000s, take to the streets in recent months.

In May, a survey of more than 1,000 people by Argentine pollsters D’Alessio Irol/Berensztein revealed that 75 percent of respondents felt seeking assistance from the Washington, DC-based IMF was problematic.

High inflation

Last year, Argentina’s budget deficit was 3.9 percent of gross domestic product (GDP). The government aims to get it down to 2.7 percent in 2018 and zero by the end of next year.

Argentina’s finance ministry has said the agreement with the IMF’s executive board includes a commitment to maintain spending on social programmes at more than 1.2 percent of GDP in order to protect the most vulnerable sectors.

More than 27 percent of the population is listed as living below the poverty line while unemployment stands at 9.6 percent.

The IMF estimates the economy will contract by 2.6 percent this year with inflation of almost 32 percent.