Argentina’s Congress approved President Javier Milei’s request for a new loan from the IMF, adding to an existing debt of $44 billion. This decision aims to bolster foreign currency reserves and facilitate debt payments. Despite public protests against austerity measures, Milei’s administration argues the loan is essential for reducing inflation and financial stability. Talks with the IMF began to replace a previous agreement from 2022, focusing on restructuring the substantial debts incurred by Argentina.
On March 11, 2023, Argentina’s Congress approved President Javier Milei’s request for authorization to negotiate a new loan with the International Monetary Fund (IMF), in addition to the existing $44 billion debt owed to the institution. Although the specifics of the new loan have not been disclosed, it aims to boost the central bank’s foreign reserves and manage upcoming debt obligations. Under a law enacted in 2021, Milei required approval from Congress, needing just the backing of one of its chambers to proceed.
In a vote within the Chamber of Deputies, Milei secured 129 votes in favor of the loan, against 108 opposing votes, alongside six abstentions. Despite his small libertarian party holding a minority position, Milei’s administration has successfully garnered support through strategic alliances to advance its fiscal agenda. This vote transpired amid significant public dissent, as demonstrators gathered to voice their opposition to the government’s austerity measures and its dealings with the IMF.
Milei has argued that the new loan will provide necessary resources to settle debts owed to the central bank and combat persistent inflation challenges facing Argentina. Under his presidency, inflation levels have dramatically decreased from 211 percent year-on-year at the end of 2023 to 66 percent currently, reflecting changes in public spending.
The administration initiated discussions with the IMF in November regarding a new Extended Fund Facility (EFF) to succeed a prior agreement from 2022. This EFF is intended to assist in restructuring Argentina’s debt and facilitate repayments on the record $44 billion loan arranged during former President Mauricio Macri’s term in 2018, known as the largest that the IMF has ever granted.
In conclusion, President Javier Milei has secured Congressional approval for a new IMF loan, crucial for alleviating Argentina’s fiscal challenges. Despite public unrest surrounding his austerity measures, the government’s actions reflect a commitment to stabilize the economy and manage debt obligations. The significant reduction in inflation rates since Milei’s administration indicates a shift in economic strategies, supported by a new agreement with the IMF aimed at ensuring financial stability for the country.
Original Source: www.rfi.fr
