BUENOS AIRES: Argentine President Javier Milei asked lawmakers early Tuesday to approve an IMF loan agreement, which he says will clean up the accounts of the country’s central bank and wipe out inflation.
The deal with the International Monetary Fund provides for “the repayment of the loan capital over a period of up to 10 years with a grace period of four years and six months,“ according to a decree signed by Milei and published in the official gazette after midnight on Tuesday.
The fresh funds — the amount of which was not specified and which is part of the IMF’s Extended Fund Facility (EFF) program — is in addition to the $44 billion already owed by Argentina to the international lender of last resort.
The sum borrowed would be used to cancel treasury bills held by the central bank (BCRA) and to pay obligations under the IMF’s EFF program, the decree says.
Under a 2021 law, the president must seek authorization from both chambers of congress to sign agreements with the IMF, but only needs support from one to go into force.
Libertarian Milei’s party has a minority in parliament but successfully used this mechanism last year when it obtained approval for two controversial decrees limiting funds for retirees and universities.
A bicameral congressional committee must issue an opinion within 10 working days of receiving the decree, and then can begin discussing it in both chambers.
In an op-ed published Saturday in the daily La Nacion, Milei said the IMF deal would allow the government to pay off its debts to the BCRA.
The president blamed Argentina’s persistently high inflation rate on an excess money supply partly caused by the deterioration of central bank assets.
“The agreement with the IMF seeks to restore the assets of the BCRA, so that inflation is only a bad memory of the past,“ he wrote.
Economist Hernan Letcher, director of the Argentine Center for Economic Policy, criticized the deal, saying on X it only “changes the creditor: from the State itself, to the IMF.”
Argentina has one of the highest inflation rates in the world, running at 84.5 percent year-on-year in January.
But since Milei took office promising to cut spending and address government debt, price rises have slowed, with inflation dropping from 211.4 percent in 2023 to 117.8 percent in 2024.
