On Wednesday, Argentina’s Congress approved President Javier Milei’s authorization to secure an additional loan from the International Monetary Fund (IMF), adding to the $44 billion Buenos Aires already owes the organization.
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 size of the potential loan for South America's second-largest economy—which has received assistance from the International Monetary Fund 22 times, even after multiple instances of defaulting on debts—hasn't been revealed yet.
According to a legislation enacted in 2021, Argentina's president is required to obtain approval from both chambers of Congress before accessing funds from the IMF; however, getting backing from just one chamber is sufficient for proceeding with such action.
With 129 votes in support and 108 opposed, along with six abstentions in the Chamber of Deputies, the lower house, Milei now has the authority to complete the accord.
Milei's minor libertarian party holds a minority position in Congress but has created temporary coalitions to advance its fiscal austerity plans.
The voting on the IMF loan occurred simultaneously as thousands of demonstrators assembled close to the legislative building to oppose Milei's severe austerity policies and his discussions with the IMF.
The demonstration was bigger but more peaceful than protests last week by pensioners and football fans that left 45 people injured.
Milei asserts that the fresh IMF loan will enable the administration to settle its obligations with the central bank and assist in "eradicating" inflation, which remains the nation's persistent nemesis.
Argentina boasts some of the highest inflation rates globally.
However, ever since Milei assumed office in December 2023 and started cutting back on public expenditure, inflation has significantly decelerated, despite an increase in poverty rates.
Inflation dropped from 211 percent year-over-year at the close of 2023 to 66 percent presently.
In November, the government initiated discussions with the IMF regarding a fresh "extended fund facility" (EFF) aimed at superseding the arrangement that has been active since 2022.
The EFF aims to renegotiate Argentina's debt to assist in paying off the $44 billion loan agreed upon during center-right President Mauricio Macri’s tenure in 2018.
It was the largest loan ever provided by the IMF.
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