Argentina’s Congress has authorized President Javier Milei to negotiate a new IMF loan to supplement the existing $44 billion debt. The approval comes amid protests against austerity measures. The aim of the loan is to strengthen the central bank’s reserves and address upcoming debt obligations. Despite reduced inflation rates since December 2023, poverty remains a pressing issue.
On Wednesday, Argentina’s Congress authorized President Javier Milei to negotiate a new loan agreement with the International Monetary Fund (IMF), adding to the existing $44 billion debt. Milei’s proposal, made on March 11, aims to secure a 10-year loan intended to bolster the central bank’s foreign currency reserves and address impending debt commitments. The specific amount of the new loan has not yet been revealed.
Following a 2021 law, the President requires approval from both houses of Congress for IMF funding but needs support from just one to move forward. In the Chamber of Deputies, the vote concluded with 129 votes in favor, 108 against, and six abstentions, empowering Milei to pursue the agreement. Despite his libertarian party holding a minority status, Milei has forged temporary coalitions to promote his fiscal strategies.
The voting act occurred amidst a demonstration of thousands protesting against Milei’s austerity measures and his ongoing discussions with the IMF. Rodolfo Celayeta, a participant in the protests stated, “Every time something is agreed with the IMF, things get worse for us.” Last week, significant unrest led to injuries for 45 individuals during confrontations with police, although the protest on Wednesday was reported to be relatively peaceful with some minor incidents.
Milei advocates the new IMF loan as a mechanism to settle debts owed to the central bank, believing it could help “exterminate” inflation, which is a persistent issue in Argentina. Currently, the nation faces one of the world’s highest inflation rates. Since assuming office in December 2023 and implementing severe budget cuts, inflation rates have notably decreased from 211 percent to 66 percent over the past year; however, poverty levels have risen during the same period.
The government initiated discussions with the IMF in November regarding a new “extended fund facility” to replace an earlier agreement established in 2022. This loan aims to help manage Argentina’s debt, including the historic $44 billion agreement entered into by former President Mauricio Macri in 2018, which remains the largest ever authorized by the IMF.
In conclusion, President Javier Milei’s successful move to secure congressional approval for negotiations with the IMF reflects his government’s ongoing efforts to manage Argentina’s substantial debt. As the country grapples with pervasive inflation and social unrest, the anticipated IMF loan is a strategic measure aimed at stabilizing the economy. While inflation rates have shown signs of decrease, challenges related to poverty and public dissent underscore the complexity of the economic landscape in Argentina.
Original Source: www.news-expressky.com
