President Javier Milei plans to issue an Emergency Decree to approve an IMF loan aimed at reducing Argentina’s public debt through a deal that cancels National Treasury debt owed to the Central Bank. Congressional approval of the decree is required for its legitimacy. The agreement is expected to enhance economic stability and facilitate investment.
The Argentine government, led by President Javier Milei, plans to issue an Emergency Decree (DNU) to approve a new loan from the International Monetary Fund (IMF). This decree requires congressional approval to remain valid, as stipulated by law. The loan agreement aims to eliminate National Treasury debt owed to the Central Bank, thereby decreasing overall public debt and enhancing the Central Bank’s balance sheet, which is expected to alleviate exchange rate constraints.
The Office of the President (OPRA) emphasized that this program will fortify the Central Bank’s balance sheet, marking a significant step necessary for ensuring monetary and macroeconomic stability, as well as continuing the disinflation efforts. Additionally, the proposed agreement outlines a public credit operation that will help the Treasury cancel its existing debt with the Central Bank, ultimately leading to a decrease in public debt levels.
The OPRA has stated that ending the long-standing inflation is a priority, asserting that President Milei requires urgent congressional support, similar to the backing received by previous administrations. The commitment to tackling inflation recognizes the mandate from voters, reflecting the expectation from elected representatives to heed the economic needs of Argentines.
Economy Minister Luis Toto Caputo confirmed that the agreement is targeted for the first four months of 2025 and alleviated concerns regarding currency devaluation, clarifying that the IMF had not requested such measures. He indicated that the new funds will enable the Central Bank’s recapitalization without escalating debt levels, facilitating investment through enhanced competitiveness and reduced tax burdens.
IMF Spokeswoman Julie Kozack clarified that Argentinian congressional approval is not a prerequisite for the IMF board’s approval of the $20 billion disbursement aimed at covering maturing debts; however, congressional endorsement would streamline the process.
In summary, President Javier Milei is advancing an Emergency Decree to approve a new IMF loan aimed at alleviating Argentina’s National Treasury debt. This initiative seeks to stabilize the Central Bank’s balance sheet and reduce public debt. With congressional approval, the agreement could expedite necessary economic reforms to combat inflation and bolster investment levels. The IMF has indicated that formal parliamentary consent is beneficial but not mandatory for disbursement.
Original Source: en.mercopress.com
