President Javier Milei of Argentina seeks congressional approval for an IMF loan agreement aimed at stabilizing the central bank and combating inflation. The deal involves loan repayment over ten years and addresses existing debts. Following a review period, the agreement requires approval from one congressional chamber to take effect, amid criticisms regarding its implications.
Argentine President Javier Milei has requested congressional approval for an International Monetary Fund (IMF) loan agreement that aims to stabilize the country’s central bank accounts and combat inflation. The agreement entails a repayment scheme for the loan capital over ten years, including a grace period of four years and six months, as detailed in a decree signed by Milei.
This loan, part of the IMF’s Extended Fund Facility (EFF), adds to the existing $44 billion Argentina owes to the IMF. The borrowed funds will be allocated to cancel treasury bills held by the Central Bank of Argentina (BCRA) and meet obligations under the EFF, addressing the nation’s financial obligations.
As per a 2021 law, Milei requires consent from both congressional chambers to finalize IMF agreements, but only needs the backing of one chamber for it to take effect. Despite his party’s minority standing in parliament, Milei has previously maneuvered to pass controversial reforms successfully.
A bicameral congressional committee has ten working days to review the decree before it is discussed in congress. In an op-ed, Milei asserted that the IMF deal would enable the government to settle debts owed to the BCRA and alleviate inflation driven by an inflated money supply.
Critics like economist Hernan Letcher argue that the agreement merely shifts the burden from the state to the IMF. Argentina faces a high inflation rate, which reached 84.5 percent year-on-year in January, although recent measures have slowed price increases since Milei’s administration began, reducing inflation from 211.4 percent in 2023 to 117.8 percent in 2024.
In summary, President Javier Milei’s request for congressional approval of an IMF loan is a strategic move aimed at stabilizing Argentina’s economy by addressing inflation and repaying central bank debts. While the agreement is essential for economic recovery, it faces scrutiny regarding its long-term impacts on national sovereignty and fiscal policy. The success of this initiative hinges largely on congressional support amidst ongoing economic challenges.
Original Source: www.hurriyetdailynews.com
