Argentina’s Congress approved a new IMF loan for President Milei, aimed at bolstering the central bank’s reserves and managing debts. Amid protests against austerity measures, the administration plans to mitigate inflation and address economic challenges. The final loan amount is still undisclosed, and the legislative support showcases Milei’s coalition-building efforts in Congress.
Argentina’s Congress recently authorized President Javier Milei to finalize a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion debt owed to the lender. The approval, which was given on March 11, enables Milei to negotiate a prospective 10-year loan aimed at augmenting the central bank’s foreign currency reserves and addressing impending debt obligations. While the specific loan amount has yet to be revealed, this move marks a crucial step for Argentina as it navigates ongoing financial challenges.
Under current legislation, the Argentinian president must receive approval from both legislative chambers for IMF transactions, though backing from just one chamber suffices to proceed. With a vote tally of 129 in favor and 108 against, along with six abstentions in the lower house, Milei’s administration can now advance to finalize the loan agreement. Despite his libertarian party’s minority status in Congress, Milei has strategically formed temporary coalitions to support his financial agenda.
As the congressional vote occurred, thousands of demonstrators rallied outside the legislature to protest against Milei’s strict austerity measures and IMF negotiations, though the demonstration appeared to be more peaceful compared to previous protests that caused injuries among pensioners and football enthusiasts. Milei has asserted that the new loan will enable the government to settle debts with the central bank and tackle the high inflation rates endemic to Argentina.
Despite initiating severe budget cuts since taking office in December 2023, inflation rates in Argentina have shown signs of improvement. While inflation decreased from a staggering 211 percent year-on-year by the end of 2023 to approximately 66 percent currently, poverty levels have risen in the country. The government has been in discussions with the IMF since November, focusing on a new Extended Fund Facility (EFF) to replace an earlier agreement established in 2022, which sought to refinance Argentina’s substantial debt obligations stemming from a previous IMF loan granted in 2018 during the term of president Mauricio Macri.
Argentina’s Congress has approved President Milei’s request for a new IMF loan, vital for boosting foreign currency reserves and managing debt payments. The loan comes amidst ongoing public protests against austerity measures. Despite significant economic challenges, including high inflation and rising poverty, Milei’s administration aims to utilize the loan to stabilize the economy. The recent voting patterns highlight both Milei’s strategic coalition-building and the contentious atmosphere surrounding fiscal reforms in Argentina.
Original Source: www.rfi.fr
