President Javier Milei claims that a new IMF deal will eliminate inflation in Argentina by allowing the government to repay debts to the Central Bank. Economy Minister Luis Caputo underlines the agreement’s urgency, with local estimates suggesting a loan between US$10 billion and US$20 billion. The IMF is currently reviewing the proposal as concerns about inflation persist in the country.
President Javier Milei asserts that a forthcoming agreement with the International Monetary Fund (IMF) will effectively eliminate Argentina’s inflation crisis. In an op-ed published in La Nación, he emphasized that this deal will enable the government to settle its debts with the Central Bank of Argentina (BCRA), attributing the nation’s high inflation to excessive money supply stemming from deteriorated BCRA assets.
Milei elaborated that funds received from the IMF would be utilized by the Treasury to reduce its indebtedness to the Central Bank, stating, “Therefore, the agreement with the IMF seeks to restore the assets of the BCRA, so that inflation is only a bad memory of the past.”
Economy Minister Luis Caputo confirmed the urgent necessity of a new finance program between Argentina and IMF staff during an interview with the LN+ channel, disclosing that parameters have been established while awaiting the board’s approval. The deal is slated to be presented to the IMF executive board, which serves as a crucial stabilizing entity in the global economy.
An IMF representative confirmed that negotiations with Argentina are progressing constructively, with local media speculating that the deal might involve a loan of approximately US$10 billion, potentially reaching up to US$20 billion. Julie Kozack, an IMF spokeswoman, noted that while “broad political and social support” could enhance program implementation, it is not a stipulation for the agreement to proceed.
Milei plans to submit a decree to Congress for the deal’s support, bypassing the traditional legislative process to expedite approval, with Caputo stressing that any delays could hinder the program’s progress. Argentina currently faces a staggering inflation rate, recorded at 84.5 percent year-on-year in January. However, following Milei’s commitment to fiscal responsibility, inflation rates have shown signs of deceleration, decreasing from 211.4 percent in 2023 to 117.8 percent in 2024.
In summary, President Javier Milei’s proposed IMF agreement is presented as a pivotal solution to Argentina’s rampant inflation, aligning government financial practices with stabilizing measures. The administration is prioritizing a swift congressional approval to facilitate the agreement, emphasizing its necessity. Continual oversight and adaptability to economic conditions will be essential in moving forward with Argentina’s economic recovery.
Original Source: www.batimes.com.ar
