President Javier Milei states that a new agreement with the IMF will help stabilize Argentina’s economy and curb inflation by addressing Central Bank debts. Economy Minister Luis Caputo confirms that negotiations are progressing and underscores the urgency of finalizing the deal. Argentina aims to secure a loan of approximately US$10 billion to US$20 billion, with an expected implementation in the first quarter.
President Javier Milei has articulated that a new agreement with the International Monetary Fund (IMF) will strategically enhance the fiscal standing of Argentina’s Central Bank while effectively curtailing inflation. In a recent op-ed for La Nación, he emphasized that this impending agreement would enable the government to discharge its outstanding debts with the Central Bank of Argentina (BCRA). Milei attributed the country’s persistent inflation to an excessive money supply stemming from the depreciation of BCRA assets.
The president remarked, “Thus, the money received from the IMF will be used by the Treasury to cancel part of its debt with the Central Bank.” He added that the objective of the IMF agreement is to restore the BCRA’s assets, transforming inflation into merely a historical concern. Prior to the release of Milei’s op-ed, Economy Minister Luis Caputo announced that a new financing program had been negotiated between Argentina and IMF staff, emphasizing the urgent need for such a deal.
Caputo stated, “The programme and the amount have been defined with the staff [of the IMF].” He noted that the next step involves presenting the agreement to the IMF’s executive board, which ultimately holds the authority to finalize the agreement. An IMF representative had previously indicated that discussions with Argentina are progressing constructively but are still ongoing.
Argentina is optimistic about finalizing the deal in the upcoming quarter, with estimates of the loan ranging from US$10 billion to as high as US$20 billion according to Wall Street analysts. IMF spokeswoman Julie Kozack highlighted that while “broad political and social support” could enhance the program’s implementation, it is not a prerequisite set by the Fund. Milei has proposed sending a decree to Congress in lieu of a bill to secure support for the impending agreement, aiming to expedite the process without extensive legislative delays.
Milei asserted, “If there is one thing we can justify, it is that this agreement is of necessity and urgency,” while emphasizing that the IMF has not mandated any devaluation of the peso. As Argentina grapples with one of the highest inflation rates globally, reported at 84.5 percent year-on-year in January, recent government actions have reportedly led to a decrease in inflation, dropping from 211.4 percent in 2023 to 117.8 percent in 2024.
In conclusion, President Javier Milei’s proposed agreement with the IMF aims to alleviate Argentina’s severe inflation crisis by addressing the financial stability of the Central Bank. The government seeks to expedite the approval of this deal, citing its urgency. While the IMF continues constructive discussions, the outcome remains contingent upon approval from its executive board. As Argentina endeavors to stabilize its economy, recent indications suggest a positive trend in reducing inflation rates under the current administration.
Original Source: www.batimes.com.ar
