Argentina’s Congress approved President Milei’s request for a new IMF loan agreement, aiming to bolster the central bank’s reserves amid existing debts. Milei’s authority derives from a strategic minority position in Congress that allows him to form necessary alliances. Public protests against austerity measures accompanied the legislation, reflecting substantial social discontent. Despite high inflation rates, measures have resulted in a significant decrease in the inflation rate since his assumption of office.
On Wednesday, Argentina’s Congress approved President Javier Milei’s request for a new International Monetary Fund (IMF) loan agreement, on top of the existing $44 billion debt owed to the institution. President Milei’s proposal includes a ten-year loan aimed at enhancing the central bank’s foreign currency reserves and addressing upcoming debt obligations. The loan amount remains undisclosed, reflecting economic uncertainties.
In accordance with a 2021 law, the President must obtain authorization from both chambers of Congress to secure IMF funds. In this instance, support from the lower house, the Chamber of Deputies, was achieved with 129 votes in favor, 108 against, and six abstentions, granting Milei the authority to finalize the agreement.
Despite holding a minority position in Congress, Milei’s libertarian party has formed strategic alliances to advance its austerity-focused agenda. The IMF loan approval coincided with significant public protests against Milei’s stringent austerity measures, although recent demonstrations were calmer compared to previous weeks which had seen violent clashes.
Milei asserts that acquiring the new loan would position the government to repay debts to the central bank and aid in combating Argentina’s stubborn inflation issue. Argentina, facing one of the highest inflation rates globally, witnessed a notable decrease, with inflation dropping from 211 percent at the end of 2023 to approximately 66 percent currently, chiefly due to Milei’s public spending cuts.
Negotiations with the IMF commenced in November to establish a new “extended fund facility” (EFF) intended to replace a 2022 agreement. This facility will primarily help manage Argentina’s significant debts, including repayments stemming from a previous record $44 billion loan secured under former president Mauricio Macri in 2018, which marked the largest IMF loan ever granted.
The approval of the new IMF loan agreement by Argentina’s Congress signifies a crucial step for President Javier Milei’s administration in attempting to stabilize the nation’s economy. Despite the contentious political landscape and public protests against austerity measures, Milei’s economic reforms have begun to yield some positive results with a notable decline in inflation rates. The government aims to utilize the new funds to navigate its substantial debt obligations and refocus the financial strategy for the future.
Original Source: www.france24.com
