Argentina’s Congress approved President Javier Milei’s request for a new IMF loan to boost foreign reserves and manage debt. Despite protests around austerity measures, Milei aims to utilize the loan to combat high inflation, which has dramatically decreased since his administration began, even as poverty rises.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion owed. Milei aims to secure a 10-year loan to bolster the central bank’s foreign reserves and address upcoming debt obligations. The precise amount for this prospective loan remains undisclosed, but it is intended to aid South America’s second-largest economy, which has seen 22 IMF bailouts despite prior debt defaults.
Under a 2021 law, the Argentine president requires authorization from both Congressional houses for IMF loans but can proceed with support from just one. Following a vote in the Chamber of Deputies that concluded with 129 votes in favor, 108 against, and six abstentions, Milei is now positioned to finalize the agreement. Despite his libertarian party’s minority status in Congress, Milei has forged ad hoc alliances to advance his cost-cutting policies.
The IMF loan vote coincided with large-scale protests outside the legislature, opposing Milei’s austerity measures and IMF negotiations. Rodolfo Celayeta, a 73-year-old retiree, expressed concerns, stating that agreements with the IMF have historically worsened circumstances for the populace. Previous protests had seen 45 individuals injured in confrontations with law enforcement, raising tensions further.
Milei has indicated that the new IMF loan will assist in repaying debts owed to the central bank and will be pivotal in combating the nation’s persistent inflation crisis. Argentina faces one of the highest inflation rates globally. Since Milei assumed office in December 2023 and initiated significant cuts to public spending, inflation rates decreased from 211 percent at the year’s end to 66 percent at present, although poverty levels have concurrently increased.
Negotiations for the new loan began in November, proposing an extended fund facility (EFF) to substitute an existing agreement from 2022. This EFF is intended to refinance Argentina’s debt and facilitate the repayment of the $44 billion loan negotiated under former president Mauricio Macri in 2018, the largest loan ever granted by the IMF.
In summary, Argentina’s Congress has authorized President Javier Milei to negotiate a new loan with the IMF to improve the country’s economic situation. This agreement seeks to enhance foreign currency reserves and address debt challenges. Despite protests and rising poverty levels, the government remains focused on reducing inflation and stabilizing the economy through strategic financial maneuvers.
Original Source: www.news-expressky.com
