Argentina’s Congress authorized President Milei to negotiate a new IMF loan to enhance currency reserves and manage debt. Despite existing obligations of $44 billion, the loan specifics remain undisclosed. Protests against austerity measures accompany the decision as Milei aims to tackle inflation and optimize financial management amid rising poverty levels.
Argentina’s Congress has authorized President Javier Milei to negotiate a new loan agreement with the International Monetary Fund (IMF), despite the $44 billion already owed. On March 11, Milei requested lawmakers to approve a new 10-year loan aimed at bolstering the central bank’s currency reserves and addressing upcoming debt obligations.
The specific amount of the anticipated loan for Argentina, the second-largest economy in South America, has not been specified. Following a 2021 legislative requirement, the president must obtain approval from both congressional houses to secure funds from the IMF, but backing from just one house is sufficient. Milei secured 129 votes in favor against 108 opponents along with six abstentions in the Chamber of Deputies, thereby clearing the way for the agreement’s finalization.
Despite Milei’s libertarian party holding a minority position, alliances have been formed to facilitate the agenda focused on reducing government costs. Concurrently, protests erupted outside the legislature as citizens opposed Milei’s austerity initiatives and dealings with the IMF. Protester Rodolfo Celayeta expressed, “Every time something is agreed with the IMF, things get worse for us.”
The protests escalated last week, resulting in confrontations with law enforcement that saw over forty individuals injured. On Wednesday night, minor incidents resumed as some demonstrators clashed with police. In response to protests, Security Minister Patricia Bullrich deemed the deployment of 2,000 officers for security a “successful” operation.
Milei argues that the proposed IMF loan will enable the government to settle debts with the central bank and “exterminate” the historically high inflation afflicting Argentina. While inflation rates have dropped from 211% at the end of 2023 to 66% currently, poverty levels have increased as public spending was curtailed following Milei’s initiation of a cost-reduction strategy in December 2023.
Negotiations with the IMF for a new extended fund facility (EFF) commenced in November, intended to replace the previous arrangement established in 2022. The EFF acts to refinance Argentina’s debts and facilitate the repayment of the $44 billion loan agreed upon during Mauricio Macri’s presidency in 2018, which was the largest ever provided by the IMF.
President Javier Milei has received Congress’s approval to negotiate a new IMF loan amid ongoing protests against austerity measures. The loan’s aim is to strengthen currency reserves, address debt obligations, and combat inflation in Argentina. Despite improvements in inflation rates since Milei’s spending cuts, poverty has risen. Discussions with the IMF to establish a new extended fund facility are underway to assist in refinancing existing loans.
Original Source: www.sanfordherald.com
