President Javier Milei announced that a new IMF agreement could eliminate inflation in Argentina by enabling the government to settle its debts with the Central Bank. He indicated that IMF funds would be used to restore Central Bank assets, aiming for inflation to become a memory. The agreement is under review by the IMF’s executive board, with a potential loan of US$10 billion to US$20 billion expected soon.
President Javier Milei asserts that a new agreement with the International Monetary Fund (IMF) will help eliminate inflation in Argentina. In his recent op-ed published in La Nación, he stated that this deal would enable the government to settle its debts with the Central Bank, thus addressing the high inflation rate attributed to an excess money supply due to deteriorating Central Bank assets.
Milei emphasized that funds received from the IMF would enable the Treasury to reduce its debt with the Central Bank. He expressed confidence that this agreement aims to restore the Central Bank’s assets, making inflation a mere recollection of the past. Economy Minister Luis Caputo confirmed the urgency of the new financial agreement between Argentina and the IMF, highlighting that discussions were advancing.
Caputo noted that the program and its details were established in collaboration with IMF staff and were slated for review by the IMF’s executive board, which ultimately decides on the agreement. Meanwhile, negotiations with Argentina were described as progressing constructively by an IMF spokeswoman.
Local media suggest that Argentina is seeking a loan ranging from US$10 billion to US$20 billion to address its financial challenges, with hopes of finalizing the agreement in the first quarter of the year. Milei indicated plans to expedite the process by presenting a decree to Congress rather than a traditional bill, citing the necessity of the agreement as urgent. He reiterated that the IMF is not demanding a devaluation of the peso.
Despite Argentina’s inflation being one of the highest globally, there have been signs of improvement since Milei’s administration commenced, including a decrease in inflation rates from 211.4 percent in 2023 to 117.8 percent in 2024.
In conclusion, President Javier Milei’s administration is pursuing a crucial agreement with the IMF to tackle Argentina’s significant inflation issues. The proposed deal, which would enable the government to settle debts with the Central Bank, aims to stabilize the economy and restore financial assets. While local reports estimate the potential loan amount, Milei’s push for urgency in the legislative process reflects the government’s commitment to addressing economic challenges efficiently.
Original Source: www.batimes.com.ar
