Argentina’s government seeks a new IMF loan agreement by April, aimed at recapitalizing the Central Bank without increasing national debt. Congressional approval will be necessary as officials negotiate funding between $10 billion and $20 billion. President Milei’s administration intends to stabilize the economy while planning to lift strict currency controls in due time.
Argentina’s current administration under President Javier Milei is actively pursuing a new loan agreement with the International Monetary Fund (IMF) to be finalized by the end of April. Presidential Spokesperson Manuel Adorni stated the government aims to complete this new deal, which would supplement the existing $44 billion loan from 2018, within the first four months of the year. Further details regarding the agreement will be released once negotiations are conclusive.
Adorni indicated the potential deal would involve the recapitalization of the Central Bank without leading to increased national debt. He also mentioned the necessity of consulting Congress regarding the feasibility of the agreement, although he refrained from specifying when lawmakers would be involved in the discussions. Legally, any new agreement must undergo congressional approval.
In December, both the IMF and Argentina confirmed ongoing negotiations for a new financing program after previous agreements fell through. The last program, valued initially at $57 billion, was negotiated in 2018 and subsequently revised in March 2022 following complications during former President Alberto Fernández’s administration.
The proposed deal aims to refinance the remaining debt from the $44.5 billion advanced to Argentina in recent years. President Milei noted that progress is being made towards an agreement and indicated he would soon seek congressional support. Some domestic reports suggest Argentina’s request may range from $10 billion to potentially $20 billion in funding.
Swiss bank UBS has projected that the financial package could involve $8 billion in new funds, with the remainder earmarked for principal and interest obligations due during Milei’s term. Analysts predict that at least 30 percent of this new funding will become available in 2025. To enhance the Central Bank’s dollar reserves, Milei is keen on securing these funds amidst austerity measures aimed at stabilizing inflation and achieving a budget surplus.
The government has not determined a timeline for lifting strict currency controls, locally termed the ‘cepo,’ though President Milei expressed a commitment that these measures would not extend into the new year. Adorni affirmed that the removal of such controls would occur “when the conditions are right.” Economy Minister Luis Caputo hinted at an agreement being finalized imminently, stating only minor details remain to be resolved.
In summary, Argentina’s government is actively negotiating a new loan agreement with the IMF, targeting completion by the end of April. This deal aims to recapitalize the Central Bank without increasing national debt, necessitating congressional consultation. As the government seeks to secure up to $20 billion in funding to bolster its reserves and manage existing debt, the resolution of currency controls remains contingent upon favorable economic conditions. Overall, these efforts reflect the administration’s commitment to stabilizing the nation’s economy amid austerity measures and high inflation.
Original Source: www.batimes.com.ar
