Argentina’s Congress has approved President Javier Milei’s request for a new IMF loan agreement to enhance foreign currency reserves and manage debt payments. With a vote of 129 to 108, Milei can now finalize the loan, despite ongoing protests against austerity measures. Inflation has decreased since he took office, though poverty levels have risen, and debt negotiations with the IMF are ongoing.
Argentina’s Congress has granted President Javier Milei the authority to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing debt of $44 billion owed to the organization. Milei initially requested this new 10-year loan on March 11 to enhance the central bank’s foreign currency reserves and manage imminent debt repayments. While the exact sum of the proposed loan remains undisclosed, it signifies an important step for Argentina, which has previously relied on IMF assistance 22 times, amid several defaults.
A law enacted in 2021 requires presidential authorization from both chambers of Congress for IMF borrowing; however, support from just one house suffices to proceed. The vote in the Chamber of Deputies concluded with 129 in favor, 108 against, and six abstentions, effectively allowing Milei to proceed with finalizing the agreement. Despite his libertarian party holding a minority position, Milei has successfully formed coalitions to advance his agenda aimed at reducing expenditures.
Prior to the vote, protests erupted outside the legislature as thousands voiced their opposition to Milei’s strict austerity measures and his negotiations with the IMF. Although the demonstration was larger, it remained more peaceful compared to previous protests that had resulted in injuries. Milei contends that securing the new loan is essential for clearing debts to the central bank and combatting the persistent issue of inflation, which has plagued Argentina significantly.
Currently, Argentina grapples with one of the highest inflation rates globally. Since taking office in December 2023 and initiating public spending cuts, inflation rates have notably moderated, from an annualized 211 percent to 66 percent. The government began discussions with the IMF in November for a new extended fund facility (EFF) to supersede an existing agreement set in place since 2022. This arrangement is critical for managing and refinancing the considerable $44-billion debt originally negotiated by President Mauricio Macri in 2018, which remains the largest loan allocated by the IMF.
In summary, President Javier Milei of Argentina has received Congressional approval for a new IMF loan aimed at bolstering the country’s foreign currency reserves and addressing imminent debt payments. Despite concerns over austerity measures and ongoing inflation challenges, Milei’s administration is optimistic that the new loan will facilitate financial stability. The situation highlights the ongoing economic crisis facing Argentina, with significant implications for its financial future and the welfare of its citizens.
Original Source: www.france24.com
