Argentina Pursues New IMF Loan Agreement by April
Argentina is targeting a new IMF loan agreement by April, seeking to refinance existing debt without increasing overall debt. Presidential Spokesperson Manuel Adorni emphasized Congress’s involvement and the plan to recapitalize the Central Bank. The government has not disclosed the timeline regarding currency control removals, although Milei committed to lifting restrictions by next year.
Argentina, under the leadership of President Javier Milei, is aiming for a new financial agreement with the International Monetary Fund (IMF) by the end of April. This new deal is in addition to the significant US$44 billion loan obtained in 2018. Presidential Spokesperson Manuel Adorni announced that the negotiations should conclude within the initial four months of the year. Details will be disclosed upon the completion of the agreement, with any significant arrangements expected to facilitate the recapitalization of the Central Bank without increasing the nation’s debt burden.
Adorni elaborated that Congress would be involved in evaluating the deal’s viability, although specifics regarding lawmakers’ participation have yet to be clarified. Any new agreement is mandated by law to be presented to Congress. Following discussions between the IMF and Argentina in December, the previous loan agreement, originally valued at US$57 billion, had been restructured by Milei’s predecessor but had faced complications by the end of 2024.
The anticipated accord aims to refinance remaining debts incurred from the US$44.5 billion loan provided over the past six years. President Milei indicated progress was being made on the new agreement and intends to secure congressional support soon. Media reports suggest Argentina is seeking a new injection of US$10 billion, with estimates from Wall Street indicating it might be as high as US$20 billion. UBS projected the financing package might include US$8 billion in new funds, while the remainder would address principal and interest payments scheduled during Milei’s term.
Economic analysts expect that approximately 30 percent of this new financial package will be operational by 2025. To stabilize the economy, Milei, implementing strict austerity measures aimed at curbing high inflation, seeks to bolster the reserves of the Central Bank. The timeline for lifting current currency and capital controls, referred to locally as the ‘cepo,’ remains uncertain, although Milei has pledged these restrictions will not extend into the coming year. “Controls will be lifted when the conditions are right,” Adorni affirmed, reflecting the government’s cautious approach to economic recovery.
In summary, Argentina is actively pursuing a new loan agreement with the IMF, aimed at addressing existing debts while ensuring economic stability. With plans to involve Congress, the Milei administration seeks to secure financial support that will not exacerbate the national debt. This ongoing negotiation highlights Argentina’s attempts to balance stringent austerity measures with the need for financial relief and bolstered reserve funds.
Original Source: www.batimes.com.ar
