Argentine President Javier Milei plans to issue an Emergency Decree to approve a new loan from the IMF, aimed at reducing public debt and improving Central Bank stability. Congressional approval is necessary for the decree, which seeks to combat inflation and enhance economic conditions without increasing debt. Economy Minister Caputo confirmed the loan agreement could be finalized by early 2025, addressing concerns of devaluation and aiming to boost investment.
President Javier Milei of Argentina intends to issue an Emergency Decree (DNU) to approve a new loan agreement with the International Monetary Fund (IMF), as announced by Casa Rosada. Under current law, each DNU requires congressional approval to remain valid. The new deal seeks to alleviate National Treasury debt owed to the Central Bank, thereby reducing overall public debt and improving the Central Bank’s balance sheet while removing exchange restrictions.
According to the President’s Office (OPRA), this program will enhance the Central Bank’s balance sheet, which is crucial for achieving stability and continuing the disinflation process. The operation represents a public credit initiative in which the National Treasury will eliminate its debt with the Central Bank, leading to a decrease in total public debt.
The OPRA further emphasized that this agreement will enhance monetary, financial, and macroeconomic stability while facilitating the release of exchange restrictions. It stated, “There is no more necessary and urgent matter than to put an end to the inflation that for years ruined the lives of Argentines.” Hence, President Milei seeks urgent collaboration from Congress, mirroring actions taken by previous administrations.
Additionally, Economy Minister Luis Toto Caputo announced at a business forum in Mendoza that the agreement is expected to be finalized in the first four months of 2025, negating concerns about currency devaluation as the IMF did not impose such a requirement. He noted that these new funds would recapitalize the Central Bank without incurring additional debt, aiming to stimulate investment by lowering taxes and enhancing competition.
IMF Spokeswoman Julie Kozack clarified that, while the approval of Argentina’s Congress is not essential for the IMF board to approve a US$20 billion disbursement for debt maturities, legislative approval would expedite the process.
In conclusion, Argentina’s President Javier Milei intends to use an Emergency Decree to facilitate a loan agreement with the IMF aimed at reducing public debt and enhancing the Central Bank’s financial stability. While congressional approval is necessary for the decree’s permanence, the agreement seeks to combat inflation, improve investment conditions, and maintain overall economic stability without increasing the country’s debt. The collaboration between the government and Congress will be pivotal in addressing Argentina’s economic challenges effectively.
Original Source: en.mercopress.com
