President Javier Milei asserts that a new agreement with the IMF will eliminate inflation by rectifying the Central Bank’s finances. Economy Minister Luis Caputo claims the financing program is urgent and ready for IMF board approval. The loan is expected to range from USD 10 to USD 20 billion, and Milei plans to expedite Congressional support through a decree. Despite high inflation, recent figures indicate a downward trend since Milei took office.
In a recent op-ed published in La Nación, President Javier Milei emphasizes that an impending agreement with the International Monetary Fund (IMF) will rectify the finances of Argentina’s Central Bank and eliminate inflation. He asserts that the excess money supply, which he attributes to the decline in Central Bank assets, is primarily responsible for the country’s rampant inflation.
Milei specifies that the funds procured from the IMF will be allocated to the Treasury for paying off part of the public debt to the Central Bank. He is optimistic that restoring these assets will ensure that inflation becomes a mere relic of the past.
Economy Minister Luis Caputo reiterated the urgency for a new financing program with the IMF, which he described as imperative. He stated that the program details have been fully outlined with IMF staff, who are now taking the agreement to the board for ratification.
The IMF serves as a stabilizing force in the global economy, and its executives will soon review Argentina’s deal, which is anticipated to be finalized in the first quarter of the year. Estimates suggest that the loan could be approximately USD 10 billion, potentially reaching up to USD 20 billion according to certain analysts.
An IMF spokesperson recently noted that while “broad political and social support” could benefit the program’s implementation, it is not mandatory. Milei has indicated a preference for expediting the process by sending a decree to Congress rather than engaging in lengthy legislative debate. Caputo has reinforced the notion that the agreement is critical and requires immediate attention, assuring that discussions with the IMF have confirmed that a devaluation of the peso is not being requested.
Despite Argentina facing one of the highest inflation rates globally, which peaked at 84.5 percent year-on-year in January, there is a hopeful decline in inflation rates since Milei’s administration took office. This signifies a reduction from 211.4 percent in 2023 to 117.8 percent in 2024, demonstrating a potential path toward economic stabilization.
President Javier Milei’s administration is actively pursuing an agreement with the IMF to address Argentina’s economic challenges, particularly its high inflation rates. The proposed deal is seen as essential for stabilizing the Central Bank’s finances and restoring investor confidence. While the details of the agreement are currently being finalized, the government emphasizes urgency in obtaining support for the economic plan, suggesting a significant shift in Argentina’s financial landscape.
Original Source: www.batimes.com.ar
