Buenos Aires, Argentina (AP) – The International Monetary Fund announced on Tuesday that it had concluded a preliminary agreement with Argentina on a bailout of $ 20 billion, providing A stay welcome to President Javier Milei While trying to overthrow the old economic order of the country.
As a staff level, the rescue package still requires the final approval of the IMF board of directors, which was to meet in the coming days.
The long -awaited announcement of the fund offered a rescue buoy to President Milei, who reduced inflation and stabilized the economy of Argentina with a free austerity program. His policies have reversed the reckless borrowing of the left -wing populist governments that brought the country’s infamy for several occasions. Argentina has received more fens from the IMF than any other nation.
He arrived at a critical moment for the second economy of South America. The pressure was mounted on the exchange reserves in Argentina exhausting rapidly while the government tightened the rules on the printing of money and spent more of its rare dollars to support the Peso Argentinian wobbly.
Fears have grown up that if the Milei government does not guarantee a loan from the IMF or operates a major source of foreign currencies, its hard -won austerity measures should trigger the track and leave Argentina, once again, unable to respond to its enormous debts or pay its import bills.
Fresh money gives Milei a serious chance of the relaxation of strict strict Argentina controls, that he says that he must encourage investment and convince the markets that his reforms can be maintained in the notoriously volatile nation.
The controls mean that companies cannot send profits abroad and ensures that the central bank manages the Peso, which is set to the dollar.
With 22 IMF loans distributed since 1958, Argentina owes the IMF more than $ 40 billion. Most IMF funds are used reimbursed the IMF itself, giving the organization a reputation for division among the Argentines. Many the lender blame for the country’s historical economic implosion and the default debt in 2001.
The IMF, which was suspicious of concluding another agreement with its greatest debtor, had nevertheless praised Milei’s austerity measures – an even more severe version of its own typical prescription – during its first 16 months in power.
The old personality of television and self-proclaimed “anarcho-capitalist” came to power in order to reduce the swollen state of Argentina, ending the country’s propensity for the printing of money, the opening of the economy on international markets and the courtification of foreign investors after years of isolation.
Unlike Argentinian politicians over the past years who have sought to avoid starting the masses with brutal austerity, Milei has drawn tens of thousands of state employees, dissolved from the ministries, emptied the education sector, reduces the adjustments of inflation for pensions, public works projects has raised, the lifting of pricing controls and priced subsidies.
Critics note that the poor have paid the highest price for the macroeconomic stability of Argentina.
But Milei has maintained solid approval ratings, which analysts attribute to his success in the drop in inflation. The reversal of budgetary deficits in surpluses has sent a worker of Argentina and its country risk rating, a pivot barometer of investors, overtime.
“The agreement is based on the first impressive progress of the authorities in the stabilization of the economy, supported by a strong budgetary anchor, which offers a rapid disinflation and a resumption of activity,” the IMF said in a statement announcing the loan agreement under a 48 -month agreement. “The program supports the next phase of the Argentina stabilization and reform program.”
It remained clear to what extent Argentina would receive an initial front in the program – a key snack point in the last negotiations on the agreement. Argentina is looking for a large initial payment to reconstruct its reservations, even if IMF loans are generally spent over several years.
Milei republished the announcement on the X social media platform, with a photo showing him the Minister of the Economy, Luis Caputo. “Vavos!” He wrote – apparently mistreating the “vamos” or “let’s go!” in his excitement.
