Argentina’s President Milei Seeks Congressional Support for IMF Loan Agreement

President Javier Milei seeks congressional approval for an IMF loan to rectify Argentina’s economic issues and tackle inflation. The deal involves a long repayment term and aims to aid the country’s central bank. Critics express reservations about the implications of the agreement.

On Tuesday, Argentine President Javier Milei requested congressional approval for an International Monetary Fund (IMF) loan agreement. He argues that this agreement will rectify the central bank’s accounts and eradicate inflation, which remains a pressing issue for the country. The IMF deal offers loan repayment over a decade, featuring a grace period of four and a half years, as detailed in a decree signed by Milei.

Although the specific loan amount remains undisclosed, it is part of the IMF’s Extended Fund Facility (EFF) program, complementing the existing $44 billion debt Argentina owes the IMF. The funds will be allocated to extinguish treasury bills held by the Central Bank of Argentina (BCRA) and meet obligations under the EFF framework.

According to a law established in 2021, the president is required to obtain authorization from both chambers of Congress for IMF agreements; however, support from just one chamber is sufficient for the deal to go into effect. Milei’s libertarian party currently holds a minority in the parliament but previously leveraged this mechanism successfully to pass contentious decrees regarding funding limitations for retirees and universities.

A bicameral congressional committee has ten working days to review the decree before it can be deliberated in both legislative chambers. In a recent opinion piece for La Nacion, President Milei asserted that the IMF agreement would enable his administration to settle the BCRA’s debts, attributing Argentina’s high inflation to excessive money supply resulting from the declining value of central bank assets.

Milei stated, “The agreement with the IMF seeks to restore the assets of the BCRA, so that inflation is only a bad memory of the past.” Despite Argentina grappling with one of the world’s highest inflation rates, recorded at 84.5% year-on-year in January, the inflation rate has shown signs of decline since Milei’s inauguration, decreasing from 211.4% in 2023 to 117.8% in 2024.

In conclusion, President Javier Milei’s appeal for congressional support of an IMF loan aims to address Argentina’s fiscal challenges and high inflation. The agreement outlines a long repayment term and is set against the backdrop of significant existing debts. While the president views the deal as a pathway to stabilize economic conditions, critics express concerns regarding the shift in creditor responsibilities. The forthcoming congressional discussions will be pivotal in determining the agreement’s fate.

Original Source: www.hurriyetdailynews.com