The International Monetary Fund said on Friday that it has reached a staff-level agreement with Argentina to unlock about $7.5 billion and complete the fifth and sixth reviews of the struggling country’s $44 billion loan programme.

The agreement, which still needs IMF Executive Board approval, eases some programme requirements because a devastating drought has created a “very challenging” economic environment in Argentina, causing some end-June financial targets to be missed.

Reuters first reported that the agreement would combine the fifth and sixth reviews of Argentina’s IMF program -- a move that provides additional loan funds sooner. The IMF said its board would meet to consider the agreement in the second half of August.

The Fund said in a statement that since the fourth review of the loan program in March, Argentina’s economic situation has become very challenging due to the larger-than-anticipated impact of a drought, which had a significant impact on exports and fiscal revenues.”

“There have also been policy slippages and delays, which have contributed to strong domestic demand and a weaker trade balance,” the IMF added.

To sustain demand for Argentina’s peso currency, the agreement calls for authorities to ensure that policy interest rates remain “sufficiently positive in real terms.”

The agreement projects a more gradual accumulation of reserves, with a target of around $1 billion by the end of 2023, compared to a $8 billion goal set in March.

The agreement calls for Argentina to tamp down import demand with new foreign exchange taxes for imported goods and to strengthen expenditure controls. But its 2023 primary fiscal deficit target remains unchanged at 1.9% of GDP, the IMF said.

With no liquid currency reserves in the central bank, Argentina has recently introduced more peso exchange rates to stop the drainage. The Fund said that the program will need waivers because these measures are “against the introduction of multiple currency practices.”

The Washington-based global lender added that the next review is expected to take place in November, a month earlier than originally scheduled.

Argentina is set to have another three reviews on its 2022 IMF programme by September 2024, though the statement didn’t specify what would happen with those.

The IMF’s board approval of the reviews would come after a primary vote on Aug. 13 in which Economy Minister Sergio Massa will run as one of the presidential candidates for the ruling coalition.

The country still needs to avoid a default with the Fund next week, with maturities of $2.6 billion due on July 31 and almost $800 million due on Aug. 1.

While it is not clear how the country will make those payments, Buenos Aires could potentially use a swap line with Beijing, a move it recently made to complete part of its June payment to the IMF. Spanish inflation ticks up as growth slows: The Spanish inflation ticked upwards in July due to higher fuel prices while growth slowed in the second quarter, preliminary data showed Friday.

Consumer prices rose 2.3 percent year-on-year, figures from the National Statistics Institute (INE) showed, up from 1.9 percent in June when it fell below the 2.0 percent target set by the Euroepan Central Bank.

The increase in prices in July was due to a rebound in fuel prices, which had fallen in July 2022, as well as higher costs for package holidays, which offset falls in electricity and gas prices, INE said.

In a separate statement, INE said Spain’s economic output rose by 0.4 percent in the second quarter, down from a revised 0.5 percent increase seen in the first three months of the year due in part to the poor performance of the country’s drought-hit agriculture sector.

The latest economic figures come after Spain held an inconclusive snap election on Sunday that could result in a repeat election in the coming months.

Socialist Prime Minister Pedro Sanchez had repeatedly flagged the results of his economic policy to win voter support ahead of the elections in which his party finished second behind the conservative Popular Party.

He is trying to cobble together enough support among smaller parties to stay in power.

Sanchez’s left-wing coalition government has implemented a series of measures to bring down inflation which hit a record 10.8 percent in July 2022, its highest level since 1985.

Under his watch the economy has outperformed most of its European Union peers, growing by 5.5 percent last year, and the government expects it will expand by 2.1 percent in 2023.

The International Monetary Fund (IMF) on Wednesday raised its growth forecast for Spain this year to 2.5 percent from 1.5 percent, citing the strong performance of the tourism sector. The latest economic figures come after Spain held an inconclusive snap election on Sunday that could result in a repeat election in the coming months.