Argentina aims for a new IMF loan deal by April, targeting funds between US$10 billion to US$20 billion. The deal seeks to recapitalize the Central Bank without increasing debt. Congressional consultation will occur, though details remain unclear. President Milei’s government emphasizes progress in negotiations, with hopes to stabilize the economy and lift currency controls soon.
Argentina’s government, led by President Javier Milei, is targeting a new loan agreement with the International Monetary Fund (IMF) by the end of April. This agreement is intended to build on the previous US$44 billion loan secured in 2018. Presidential Spokesperson Manuel Adorni stated that details will be shared once they are finalized, emphasizing that any deal would not increase Argentina’s overall debt.
Adorni noted that the agreement would involve recapitalizing the Central Bank and that Congress would be consulted about the deal’s viability. However, specifics on when lawmakers will be involved in negotiations have not been provided. According to Argentine law, any new agreement with the IMF requires legislative approval.
Negotiations for the new financing program between Argentina and the IMF were confirmed in December. The country originally agreed to a US$57 billion program in 2018, which underwent renegotiation by former President Alberto Fernández in 2022. The new agreement is expected to refinance outstanding debts from the previous loans.
In his recent state of the nation address, Milei stated that positive progress was being made with the IMF and expressed intent to seek Congressional support for the new agreement. Domestic reports suggest Argentina may be pursuing US$10 billion in new funding, while some Wall Street sources indicate the amount may be as high as US$20 billion.
Analysis by Swiss bank UBS suggests the package would likely include US$8 billion in new funds, with the remainder allocated for principal and interest on existing debt. There is an expectation that at least 30 percent of this new funding will be available in 2025.
Milei, who has implemented significant austerity measures to combat inflation and create a budget surplus, aims to utilize the new funds to bolster the Central Bank’s dollar reserves. The timeline for lifting strict currency controls, known locally as ‘cepo,’ remains unclear, though Milei has pledged they will not be in place by the start of the next year. Adorni mentioned that these controls would be lifted when conditions permit.
Argentina is actively pursuing a new loan deal with the IMF, aiming for completion by the end of April. The agreement will involve recapitalizing the Central Bank without increasing national debt. The government seeks substantial funding, with varying estimates suggesting between US$10 billion and US$20 billion, to support its finances and bolster currency reserves. The timeline for lifting capital controls is undetermined, relying on favorable conditions.
Original Source: www.batimes.com.ar
