Argentina’s Congress Approves New IMF Loan for Economic Stabilization

Argentina’s Congress has approved President Javier Milei to negotiate a new IMF loan, aiming to boost foreign currency reserves and manage debt payments. The specific loan amount is currently undisclosed. Although facing public protests against austerity measures, Milei argues the funds are necessary to combat inflation, which remains among the highest in the world.

On Wednesday, Argentina’s Congress approved President Javier Milei’s proposal to negotiate a new International Monetary Fund (IMF) loan, adding to the existing $44 billion debt. Milei aims to secure a 10-year loan to enhance the central bank’s foreign currency reserves and manage impending debt obligations. The specific amount of the prospective loan remains undisclosed.
Under a 2021 statute, the president is required to obtain authorization from both houses of Congress for IMF loans, though support from only one is necessary to proceed. In the Chamber of Deputies, the vote resulted in 129 in favor, 108 against, with six abstentions, permitting Milei to finalize the agreement.
Milei’s libertarian party holds a minority position in Congress but has formed temporary alliances to promote its cost-reduction policies. Concurrently, thousands of protesters gathered outside the legislature, opposing Milei’s austerity measures and IMF discussions. Demonstrator Rodolfo Celayeta expressed, “Every time something is agreed with the IMF, things get worse for us.”
Despite the situation remaining mostly peaceful in contrast to previous protests, some minor incidents occurred, with demonstrators throwing projectiles at police, resulting in minor injuries among law enforcement. Security Minister Patricia Bullrich described the deployment of 2,000 officers for the operation as “successful.”
Milei asserts that the new IMF loan will facilitate the repayment of debts to the central bank and aid in “exterminating” inflation, a pervasive issue for the nation. Argentina currently faces one of the highest inflation rates globally.
Since assuming office in December 2023 and enacting significant public expenditure cuts, the inflation rate has dramatically decreased from 211 percent yearly to 66 percent presently. The government initiated discussions with the IMF in November regarding a new “extended fund facility” (EFF), aiming to refinance existing debts, particularly a $44 billion loan obtained in 2018 under former president Mauricio Macri, which was the largest ever sanctioned by the IMF.

In summary, Argentina’s Congress has authorized President Milei to pursue a new IMF loan to bolster the nation’s foreign reserves and address debt obligations. Despite ongoing public protests against austerity measures, the government maintains that the loan is crucial for stabilizing the economy and combating inflation. The approval reflects Milei’s commitment to pushing through a strict financial agenda, even in the face of significant public opposition.

Original Source: www.news-expressky.com