Argentina’s Congress Approves New Loan Agreement with IMF Under Milei’s Leadership
Argentina’s lower house has approved President Javier Milei’s request for a new IMF loan aimed at boosting foreign reserves and addressing debt obligations. The initiative, supported by various political parties, faced protests against austerity measures. The government claims this loan is critical for combating inflation and ensuring economic stability despite public opposition.
On Wednesday, Argentina’s lower house of Congress approved President Javier Milei’s initiative to negotiate a new loan with the International Monetary Fund (IMF). This agreement seeks a 10-year loan that would supplement the existing US$44 billion that Argentina borrowed in 2018. The funds are intended to strengthen the Central Bank’s foreign reserves and meet upcoming debt obligations.
While the exact amount of the proposed loan remains undisclosed, it is expected to include a grace period for repayments of four-and-a-half years. Ongoing negotiations with the IMF are confidential, leading to increased speculation regarding potential changes in the nation’s currency policy, which has recently caused the peso to reach a five-month low on the parallel market.
Under current law, the Argentine president must obtain authorization from both legislative chambers to finalize any IMF agreements. However, an emergency decree only requires approval from one chamber. With a final vote tally of 129 in favor, 108 against, and six abstentions, President Milei is now positioned to proceed with the agreement despite having a minority ruling party.
The initiative garnered support from several political factions, including Milei’s La Libertad Avanza party, the right-wing PRO party, and multiple centrist and regional groups. Celebrating the legislative victory on social media, Milei stated that the result conveys a “message of maturity and greatness.”
Simultaneously, protests erupted outside Congress, where thousands voiced their discontent over Milei’s austerity measures, including pension cuts and IMF dealings. Demonstrators expressed that previous agreements with the IMF have negatively impacted their lives, highlighting ongoing opposition to the government’s fiscal policies.
Milei argues that the new loan is essential for clearing debts with the Central Bank, claiming it will ultimately help eradicate inflation—a persistent issue in Argentina. Inflation rates have reportedly diminished since he took office, yet poverty has escalated. The proposed extended fund facility (EFF) aims to refinance Argentina’s debt and bolster economic stability.
The government urgently requires these fresh funds from the IMF to enhance foreign reserves and reassure financial markets, particularly as the Central Bank has expended nearly US$932 million over four days to stabilize the peso. Lawmakers from the governing party anticipate that the agreement will foster long-term economic stability and development, while some opposition members express skepticism about the effectiveness of IMF intervention.
In conclusion, President Javier Milei’s government has secured Congressional approval for negotiations regarding a new loan with the International Monetary Fund. This move aims to bolster foreign reserves and manage existing debts amid persistent inflation issues in Argentina. Protests against austerity measures reflect significant public dissent, while the government maintains that the loan is necessary for economic stability and progress.
Original Source: www.batimes.com.ar
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