President Javier Milei plans to issue an Emergency Decree to approve a loan from the IMF, aiming to reduce Argentina’s public debt and enhance the Central Bank’s balance sheet. This initiative is crucial for stabilizing the economy and combatting inflation. Congressional approval, although not mandatory for the loan’s approval, is sought for expedited support.
The Argentine government, led by President Javier Milei, intends to approve a loan agreement with the International Monetary Fund (IMF) through an Emergency Decree (DNU). This announcement was made by the Casa Rosada, which stated that although the DNU requires subsequent congressional approval, it is a necessary step in the process. The new deal aims to cancel existing National Treasury debt with the Central Bank, thereby reducing total public debt and enhancing the Central Bank’s financial position, ultimately lifting exchange restrictions.
The Office of the President (OPRA) emphasized that this initiative will strengthen the Central Bank’s balance sheet, marking a critical achievement to stabilize the economy and enable ongoing disinflation efforts. The agreement will be executed as a public credit operation, alleviating debt with the Central Bank, which is expected to yield a reduction in overall public debt.
The OPRA expressed urgency in addressing inflation, which has significantly impacted the lives of many Argentinians. President Milei’s administration seeks prompt congressional support, akin to previous governments’ experiences. They emphasized the importance of a unified national effort to combat inflation, indicating that legislative commitment directly reflects the electorate’s expectations.
In remarks at a business forum in Mendoza, Economy Minister Luis Toto Caputo confirmed the loan agreement’s expectations for the first four months of 2025. He assured that there would be no currency devaluation required by the IMF and highlighted the role of these new funds in recapitalizing the Central Bank without escalating debt levels, paving the way for increased investment through competitive fiscal measures.
Moreover, while IMF Spokeswoman Julie Kozack clarified that congressional approval was not mandatory for the IMF board to approve a crucial US$ 20 billion disbursement intended for debt maturities, she noted that such approval would facilitate a quicker process.
In summary, President Javier Milei’s administration is set to use an Emergency Decree to expedite approval for a loan from the IMF, aimed at reducing public debt and stabilizing the economy. This strategic initiative underscores the urgency to combat inflation in Argentina. Minister Luis Toto Caputo reassured the public that the deal would not involve currency devaluation. While congressional approval is not necessary for the IMF disbursement, it would enhance the process.
Original Source: en.mercopress.com
