Argentine President Javier Milei seeks congressional approval for an IMF loan arrangement intended to resolve central bank accounts and curb inflation. The agreement entails a repayment structure over ten years and uses funds to settle treasury bills and obligations under the IMF program. Although inflation remains high, recent data indicate a decrease since Milei’s inauguration, amid criticisms of the loan’s long-term implications.
In Buenos Aires, Argentine President Javier Milei has requested legislative approval for a loan agreement with the International Monetary Fund (IMF). He asserts that this agreement will help rectify the central bank’s accounts and eliminate inflation. The proposed deal outlines a repayment period of up to ten years, including a grace period of four years and six months, as per the decree published on Tuesday.
The new loan, whose amount remains unspecified, is a component of the IMF’s Extended Fund Facility (EFF) program. It is in addition to the existing $44 billion that Argentina owes to the IMF. The funds will primarily be used to settle treasury bills held by the central bank and to fulfill obligations under the EFF program.
According to a 2021 regulation, President Milei requires authorization from both chambers of Congress to finalize agreements with the IMF, although support from only one chamber is needed for the deal to go into effect. Despite having a minority in parliament, Milei’s party previously secured the approval of two controversial decrees through this mechanism.
A bicameral committee is required to form an opinion on the decree within ten working days before commencing discussions in both legislative chambers. In a recent op-ed, Milei mentioned that the IMF agreement would enable the government to pay its debts to the central bank, asserting that the persistent high inflation is partly due to excess money supply and the decline of the central bank’s assets.
Economist Hernan Letcher criticized the deal, claiming it merely shifts the creditor from the state to the IMF. Argentina experiences one of the highest inflation rates globally, recorded at 84.5 percent year-on-year in January. However, since Milei’s inauguration and his commitment to reduce spending and address government debt, there has been a notable decrease in inflation from 211.4 percent in 2023 to 117.8 percent in 2024.
President Javier Milei has approached Congress for approval of an IMF loan agreement aimed at rectifying Argentina’s economic issues, particularly inflation. The agreement proposes a structured repayment plan, and while it is a step towards stabilizing the economy, it faces criticism from experts regarding its long-term effectiveness. The context of the negotiations reflects the country’s ongoing struggle with high inflation rates, although recent trends suggest some improvement since Milei’s administration began.
Original Source: www.hurriyetdailynews.com
