Argentine President Javier Milei stated that a new IMF deal will stabilize the central bank of the country and eradicate inflation.
In a Saturday op-ed in La Nacion, Milei called the agreement a way to sanitize Argentina’s accounts and lower the burden of the country’s debt.
Addressing Inflation Through Central Bank Reforms
Milei blamed Argentina’s chronic inflationary crisis on abundant money supply, partly the result of deterioration of the assets of the central bank (BCRA).
“The money that is thus obtained from the IMF will be used by the Treasury to offset part of its debt to the Central Bank,” he explained.
He went further to reiterate that the pact is seeking to put BCRA’s financial well-being on a sound track to enable “inflation to remain only an ill memory of the past.”
IMF Deal in Final Stages
On Friday, Finance Minister Luis Caputo announced that Argentina and IMF staff had agreed on a financial program. The deal is still awaiting approval from the IMF board.
An IMF spokesperson said on Thursday that negotiations were going “constructively” but were still under discussion.
Loan Expected to Boost Argentina’s Economy
Argentina is planning to seal the deal in the first quarter of the year, with local media putting the loan size at around $10 billion.
With one of the world’s highest inflation rates, Argentina posted an annual inflation rate of 84.5% in January. But since President Milei came into office with a promise to slash spending and lower debt, inflation has eased—down from 211.4% in 2023 to 117.8% in 2024.
The new IMF agreement is likely to bring much-needed financial relief and additional stability to Argentina’s economy.
