IMF lowers Argentina's reserves target to $8 bln as farm income hit

NEW YORK, April 3 (Reuters) - The International Monetary Fund (IMF) executive board lowered Argentina's net reserves accumulation target for the end of 2023 to $8 billion, the lender said on Monday, in a boost to the government's beleaguered finances.

The IMF's previous reserves target was $9.8 billion.

Easing this year-end goal was part of the fourth review under the country's $44 billion IMF loan program, with Argentina looking to soften expectations as it faces a severe drought that is eroding farm exports crucial to bringing in U.S. dollars and building up central bank hard currency reserves.

Argentina is major global exporter of processed soybeans, corn and wheat, which together generate most of its foreign currency income.

The central bank should now aim to have $10.3 billion of net reserves by the end of December, as the cumulative target adds to the $2.3 billion of reserves held at the end of 2021.

The targeted reserves will also change for each quarter of this year, lowering the bar for the South American economy to pass future IMF reviews.

Meeting the reserve targets are crucial for the government of President Alberto Fernandez, in large part to allow future payments as part of the debt deal from the international lender to flow.

The target lowering is heavily front-loaded, with the end-March target now at $1.9 billion, down from $5.5 billion, while the target for the second quarter was eased to $6.8 billion from $8.6 billion. For the end-September goal, the target now is $7.2 billion against the $8.7 billion agreed on the previous review.

The IMF previously said it approved the lower targets "to partially accommodate the impact of the severe drought" while also promoting economic stability and addressing setbacks.

But, weighing on further reserve accumulation, Argentina's central bank in March sold the largest monthly amount of dollars since 2019 as it struggles to prop up the peso currency amid triple-digit inflation.

The Argentine peso is down nearly 16% this year versus the greenback. (Reporting by Rodrigo Campos in New York and Jorgelina do Rosario in London; Additional reporting by Jorge Otaola in Buenos Aires; Editing by Sarah Morland and Christian Schmollinger)