Argentina’s Congress grants President Milei permission to pursue a new IMF loan to address its substantial debt. This approval follows public protests against austerity measures. The loan aims to enhance foreign currency reserves and alleviate inflation issues in the nation.
Argentina’s Congress has authorized President Javier Milei to negotiate a new loan from the International Monetary Fund (IMF) amidst its existing $44 billion debt to the institution. On March 11, Milei sought legislative approval for a 10-year loan aimed at bolstering the central bank’s foreign currency reserves and meeting upcoming debt obligations. The specific amount of the loan is currently undisclosed.
Under a law enacted in 2021, the president is required to obtain consent from both houses of Congress for IMF funding but needs approval from just one house to proceed. With a vote of 129 in favor, 108 against, and six abstentions in the Chamber of Deputies, Milei is now positioned to finalize the loan agreement. Although Milei’s libertarian party is a minority in Congress, it has succeeded in forming alliances to promote its fiscal reforms.
The vote unfolded amid widespread protests outside the legislature opposing Milei’s austerity measures and IMF negotiations. Demonstrators expressed frustration, with one protester stating, “Every time something is agreed with the IMF, things get worse for us.” The protests were larger but more subdued compared to previous violent confrontations between demonstrators and police. Security Minister Patricia Bullrich described the operation managing the protests as “successful” despite some minor incidents.
Milei asserts that this new IMF loan will enable the government to settle debts with the central bank and combat the persistent issue of inflation, one of Argentina’s most pressing concerns. Argentina has been facing historically high inflation rates, which soared to 211 percent year-on-year at the end of 2023, before decreasing to 66 percent today. While measures to cut public spending have curbed price rises, poverty levels have increased. The government has begun negotiations with the IMF to secure an extended fund facility (EFF) to restructure its debt obligations from previous agreements.
In summary, Argentina’s Congress has approved President Javier Milei’s request to negotiate a new IMF loan to address the nation’s debt and strengthen its foreign currency reserves. This decision comes amid public discontent regarding austerity measures and protests against IMF engagements. The proposed loan aims to combat inflation, a significant economic challenge for Argentina, while ongoing negotiations with the IMF may reshape the country’s fiscal landscape.
Original Source: www.news-expressky.com
