Argentina’s Milei Secures Congressional Approval for New IMF Loan
Argentina’s Congress has approved President Javier Milei’s request for a new loan agreement with the IMF, amid ongoing public protests against his austerity measures. The loan aims to enhance the central bank’s reserves and manage debt repayments, as Argentina strives to mitigate its high inflation and economic challenges.
On March 11, Argentine President Javier Milei received congressional approval to negotiate a new loan agreement with the International Monetary Fund (IMF). This approval complements the existing $44 billion debt that Argentina owes to the IMF. The planned loan aims to bolster the central bank’s foreign currency reserves and facilitate forthcoming debt repayments.
The exact amount of the new loan for Argentina, the second-largest economy in South America which has received IMF bailouts 22 times thus far, remains undisclosed. A 2021 law mandates that the Argentine President must obtain authorization from both houses of Congress for IMF funding, though only one house’s support is necessary to proceed.
The vote concluded with 129 votes in favor, 108 against, and six abstentions in the Chamber of Deputies, granting Milei the necessary mandate to finalize the loan agreement. Despite his libertarian party holding a minority position in Congress, Milei has successfully formed alliances to advance his austerity agenda, even as public discontent stirred protests against these measures near the legislative body.
Thousands demonstrated their dissatisfaction with Milei’s austerity policies and his engagement with the IMF. The recent protests, although larger, were more subdued compared to previous violent outbreaks, which had resulted in injuries.
Milei contends that the new IMF loan will help address the government’s debts to the central bank and eradicate inflation, which has severely impacted the economy. Argentina is currently facing one of the highest inflation rates worldwide, although the rate has decreased significantly since Milei took office in December 2023, from 211 percent year-on-year down to 66 percent.
Discussions for a new “extended fund facility” (EFF) with the IMF began in November, diversging from the existing agreement established in 2022. The EFF is designed to refinance Argentina’s debt and manage the substantial $44 billion loan originally negotiated in 2018 under then-President Mauricio Macri, which remains the largest single loan disbursed by the IMF.
In summary, Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan, aimed at strengthening the central bank’s reserves and managing debt obligations. Despite facing public protests against austerity measures, Milei’s administration claims the loan will help tackle inflation. Argentina continues to grapple with significant economic challenges, including high inflation rates and increasing poverty levels, as it seeks support from international financial institutions.
Original Source: www.france24.com
Post Comment