Argentina’s Milei wins congress green light for new IMF loan

BUENOS AIRES

Argentina's Congress has given President Javier Milei the green light to negotiate a new IMF loan agreement, on top of the $44 billion Buenos Aires already owes the lender.

Milei asked lawmakers on March 11 to approve a new 10-year loan to boost the central bank's foreign currency reserves and cover looming debt payments.

The amount of the prospective loan to South America's second-biggest economy, which has been bailed out by the International Monetary Fund 22 times, despite several debt defaults, has not yet been disclosed.

Under a 2021 law, Argentina's president must seek authorization from both houses of Congress to take money from the IMF, but only needs support from one to proceed.

On March 19, with 129 votes in favor to 108 against and six abstentions in the Chamber of Deputies, the lower house, Milei now has a free hand to finalize the agreement.

The vote on the IMF loan took place as thousands of protesters gathered near the legislature to protest Milei's austerity measures as well as his negotiations with the IMF.

Milei says the new IMF loan will allow the government to pay off its debts to the central bank and help "exterminate" inflation, the country's eternal bugbear.

Argentina has one of the highest inflation rates in the world.

Since Milei took office in December 2023 and began slashing public spending, price rises have slowed considerably, though poverty levels have risen.

Inflation fell from 211 percent year-on-year at the end of 2023 to 66 percent today.

The government began talks with the IMF in November on a new "extended fund facility" (EFF) to replace an agreement in place since 2022.

The EFF serves to refinance Argentina's debt, to help it pay off the $44-billion loan negotiated under center-right president Mauricio Macri in 2018.

The loan was the biggest ever granted by the IMF.