Argentina negotiates a new loan with the IMF for USD 20,000 million

Argentina requested the International Monetary Fund (IMF) a new loan for 20,000 million dollars, the Minister of Economy announced at a time when the country suffers strong exchange pressure on the peso.

AFP

The program must still be approved by the Board of the Financial Agency, with which the South American country already signed an agreement for 44,000 million dollars that represented its largest indebtedness.

In addition to this request whose amount the IMF did not confirm, Minister Luis Caputo said that Argentina negotiates «an additional package of free availability» with organizations such as the World Bank (BM) and the Inter -American Bank Development (IDB) to strengthen its reserves.

The program, whose details are reserved, «in no way» includes a devaluation, President Javier Milei ruled out to Radio El Observador.

«Here pesos are missing, there is no lack of dollars,» he said despite the multiple orders for external aid.

The Government seeks to appease uncertainty about possible IMF demands to eliminate exchange controls or the possible adoption of an administered weight flotation.

In the last week the interventions in the change market represented a bleeding of reservations of more than 1.2 billion dollars. The Central Bank reported Thursday that it has reservations for 26,222 million dollars.

The IMF declined to confirm the amount of the eventual new agreement with Argentina and clarified that the disbursements will be «in sections.»

«I can simply confirm that the size of the final package for Argentina will be determined by the Executive Board and that the negotiations suggest that it is a considerable financing pack,» Julie Kozackla, spokesman for the fund, told AFP.

Caputo said that during a dialogue on Wednesday with the IMF managing director, Kristalina Georgieva, he anticipated that he would disseminate the figure.

«I told him that since they can be missing a few weeks to summon the ‘Board’ (directory) and taking into account that the rumors what they try most» is to destabilize, «at least it would be good that you can say the amount we have agreed» and that the IMF must approve, the minister explained.

– «Destabilization» –

The background praised that «despite the drastic macroeconomic adjustment» that Milei applied, «the activity is recovering strongly, real wages are increasing and poverty is decreasing», but it is necessary to «move towards the following stages.»

«There is a shared recognition of the need to continue adopting a coherent set of fiscal, monetary and exchange policies, while promoting and deepening growth and enhancing reforms,» ​​he added.

The minister considered that the run against weight is an «attempt to destabilization» against the Milei government, behind which he pointed out «the opposition.»

The weekly protests that retirees face the Congress demanding an increase in their assets – the majority below the poverty line – have added the support of unions, football fans and social organizations, in fiercely repressed protests by the police.

In addition, the main workers’ central CGT called a general strike for April 10 to repudiate the repression and government adjustment policy.

– «Recapitalize» the Central Bank –

As for the destination of the new funds, Minister Caputo said that «they will not be to finance expenses but to recapitalize the asset of the Central Bank.»

«When you see gross reserves and add what comes (from the IMF) those reserves will rise around 50 billion dollars,» Caputo said at an insurance conference.

The pressure on the weight and its eventual transfer to prices implies a risk to the Milei Government, which has made inflation control its main achievement by reducing it from 211% by 2023 to 117% last year, although at the expense of a severe fiscal austerity policy whose contract is the economic recession with 14 consecutive months of falling consumption.

Containing inflation is its main political capital when the electoral campaign for the legislative of October is coming, where the ruling, without majorities in Congress, seeks to add benches.

In Argentina, five dollar contributions coexist with a black market where the ‘Blue’ quoted Thursday around 1,300 pesos per green ticket, while the official change was located at 1,091 pesos, the largest gap in more than six months.