Argentina’s President Milei Seeks Congressional Support for IMF Agreement
President Javier Milei seeks Congressional approval for an IMF loan agreement, aimed at stabilizing the central bank and addressing inflation. The plan involves a 10-year repayment period and intends to clear debts owed to the BCRA. Despite criticism, the deal reflects Milei’s commitment to reforming Argentina’s economy amid ongoing inflation challenges.
Argentine President Javier Milei has requested congressional approval for an agreement with the International Monetary Fund (IMF), which he claims will stabilize the central bank’s accounts and eliminate inflation. The proposed deal offers a 10-year loan repayment period with a four-and-a-half-year grace period, as outlined in a decree released shortly after midnight on Tuesday.
This financing, which forms part of the IMF’s Extended Fund Facility (EFF), comprises an unspecified amount that joins the existing $44 billion owed by Argentina to the IMF. The funds will be allocated to extinguish treasury bills held by the Central Bank of Argentina (BCRA) and to meet obligations under the EFF viably.
A 2021 law mandates that the president must obtain approval from both congress chambers to enter agreements with the IMF; however, only one chamber’s support is required for implementation. Despite his party’s minority status, Milei has previously used this legislative loophole to pass contentious decrees.
A bicameral committee is tasked with delivering an opinion on the decree within ten working days, after which discussions will commence in both chambers. In a recent op-ed, Milei asserted the IMF agreement would enable the government to settle debts to the BCRA, attributing high inflation rates to excess money supply and deteriorating bank assets.
Milei expressed, “The agreement with the IMF seeks to restore the assets of the BCRA, so that inflation is only a bad memory of the past.” On the contrary, economist Hernan Letcher has criticized the arrangement, stating it merely shifts the creditor from the state to the IMF. As of January, Argentina’s inflation rate remains exceedingly high at 84.5% year-on-year. However, under Milei’s administration, inflation has decreased from 211.4% in 2023 to 117.8% in 2024, reflecting a slowdown in price increases despite persistent challenges.
In summary, President Javier Milei has submitted a request to Congress for backing a crucial IMF loan agreement aimed at addressing Argentina’s rampant inflation and stabilizing its central bank. The proposed terms include a long repayment period and funding to settle existing debts with the BCRA. While supporters hope this will restore financial order, critics voice concerns regarding the implications of increasing dependency on international lenders. As Argentina faces serious economic challenges, the outcome of this legislative process could have significant repercussions for its financial future.
Original Source: thesun.my
