The International Monetary Fund is studying a request from Argentina to speed up the payout of a $50bn loan programme.
The unexpected appeal from Argentina comes after a collapse in investor confidence in President Mauricio Macri’s government sent the peso tumbling more than 7% yesterday.
It was the biggest one-day decline in the peso since the currency was allowed to float in December 2015.
It closed at a record low of 34.10 per US dollar and is down more than 45.3% against the dollar this year, prompting massive central bank interventions.
Nerves are frayed in Latin America’s third biggest economy as it struggles to break free from its notorious cycle of once-a-decade financial crises.
The last one, which was punctuated by a 2002 debt default, put millions of middle-class Argentines into poverty.
The run on the peso prompted Argentina to turn to the IMF for the $50bn credit line earlier this year.
As part of the deal, Argentina’s government pledged to speed up plans to reduce the fiscal deficit.
But given the peso’s continued depreciation, which makes the country’s dollar-denominated debts more expensive to pay, investors are increasingly concerned that the IMF help may not be enough.
"We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial programme next year," President Macri said in a televised address yesterday. "This decision aims to eliminate any uncertainty."
"Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019," Mr Macri said.
IMF Managing Director Christine Lagarde responded by saying in a statement that the multi-lateral lender’s staff would "reexamine the phasing of the financial programme".
She said that the "more adverse international market conditions" had not been "fully anticipated" when the IMF and Argentina reached the deal in June.
"Authorities will be working to revise the government’s economic plan with a focus on better insulating Argentina from the recent shifts in global financial markets, including through stronger monetary and fiscal policies," Ms Lagarde said.
Argentina has $24.9bn in peso and foreign currency-denominated debt payments due next year, according to official data.
Speaking to reporters after the IMF statement was issued, Argentina's treasury minister Nicolas Dujovne said the government would reduce the size of its financing programme, but did not provide specifics.