Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan, in addition to the existing $44 billion debt. This new agreement aims to bolster the central bank’s reserves and address upcoming payments. Despite protests against Milei’s austerity measures, the vote was passed with a significant majority in the Chamber of Deputies, indicating support for the government’s financial strategies amidst high inflation and rising poverty levels.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request for a new loan agreement with the International Monetary Fund (IMF), in addition to the existing debt of $44 billion owed. This new initiative aims to enhance the central bank’s foreign currency reserves and address upcoming debt obligations. The specifics of the loan amount have not yet been disclosed.
Per legislation enacted in 2021, the president of Argentina must obtain authorization from both chambers of Congress to secure funds from the IMF, although approval from only one house suffices for action. In a significant development, the lower house, the Chamber of Deputies, supported Milei with a vote tally of 129 in favor, 108 against, and six abstentions, granting him the authority to finalize the loan agreement.
Despite the minority status of Milei’s libertarian party, he has managed to foster temporary coalitions within Congress to advance his austerity measures. The approval of this loan came amid protests outside the legislature, where demonstrators voiced opposition to Milei’s stringent economic policies and negotiations with the IMF, though the protests were reported as larger yet more peaceful compared to previous weeks.
Milei contends that this new IMF loan will facilitate the repayment of central bank debts and combat the high inflation rate that has plagued Argentina. Presently, the country faces one of the world’s highest inflation rates. Since Milei took office in December 2023 and initiated severe cuts to government spending, inflation levels have noticeably decreased from 211% year-on-year at the close of 2023 to 66% currently, albeit with a rise in poverty levels.
The government commenced discussions with the IMF in November regarding a new extended fund facility (EFF) designed to supersede a prior agreement established in 2022. This facility aims to refinance Argentina’s substantial debt and manage the repayment of the previous historic $44 billion loan arranged during the presidency of Mauricio Macri in 2018, which remains the largest loan issued by the IMF to date.
In conclusion, President Javier Milei’s successful bid for Congressional approval to negotiate a new IMF loan underscores his administration’s commitment to addressing Argentina’s significant economic challenges. While the anticipated loan seeks to bolster foreign currency reserves and manage looming debt, it arrives amid widespread public dissent against austerity measures. As inflation rates continue to fluctuate, the efficacy of these strategies in alleviating the national economic predicament remains to be seen.
Original Source: www.france24.com
