Argentina’s Congress has approved President Javier Milei’s request for a new IMF loan aimed at bolstering foreign currency reserves and managing debt. The 10-year loan approval comes amid protests against austerity measures. Milei hopes this funding will combat high inflation, which has decreased since he assumed office. The government’s coalition secured enough votes in a tense legislative session.
Argentina’s lower house of Congress has approved President Javier Milei’s request to negotiate a new loan agreement with the International Monetary Fund (IMF). This loan, proposed for a duration of 10 years, aims to enhance the Central Bank’s foreign currency reserves and manage anticipated debt obligations. The amount of the loan is yet to be disclosed, although it will include a grace period of four and a half years for repayments, while negotiations continue with the IMF.
This loan follows a substantial borrowing of US$44 billion by former President Mauricio Macri’s administration in 2018. Under a 2021 statute, the Argentinian president must receive authorization from both legislative chambers to finalize agreements with the IMF; however, an emergency executive decree may only require approval from one chamber.
Milei has garnered sufficient support from a coalition of parties within Congress, securing 129 votes in favor and 108 against, along with six abstentions. The measure received backing not only from his party, La Libertad Avanza, but also from right-wing and centrist allies. Following this success, Milei expressed his approval on social media, deeming it a “message of maturity and greatness.”
Meanwhile, protests erupted outside Congress, where demonstrators voiced their opposition to austerity measures and pension cuts tied to Milei’s negotiations with the IMF. Recent violent incidents escalated these protests, with demonstrators clashing with police. Security officials reported a contingent of approximately 2,000 officers to maintain order during these events.
Milei insists that obtaining this loan will facilitate the government’s payment of debts to the Central Bank, aiming to “exterminate” inflation in the country. Argentina is currently grappling with high inflation rates, yet since Milei’s austerity measures began, inflation has decreased significantly, dropping from 211 percent in late 2023 to 66 percent presently. The government is pursuing a new “extended fund facility” agreement with the IMF to refinance its debt obligations from the past, thereby ensuring the country’s economic stability.
In summary, President Javier Milei’s government has gained legislative approval to negotiate a new IMF loan aimed at strengthening Argentina’s financial position amid high inflation rates and pressing debt obligations. While Milei’s measures have facilitated a decrease in inflation, protests highlight public discontent regarding austerity measures. The government cites the urgent need for fiscal stability, as it seeks to secure necessary funding to alleviate economic challenges and encourage market confidence.
Original Source: www.batimes.com.ar
