Police officers stand outside the National Congress as the Senate debates the government’s agreement with the International Monetary Fund (IMF) March 17, 2022 in Buenos Aires, Argentina. REUTERS/Agustin Marcarian
March 18, 2022
By Adam Jourdan and Walter Bianchi
BUENOS AIRES (Reuters) – Argentina’s $45 billion debt deal with the International Monetary Fund, approved by the country’s Congress on Thursday, now faces its final hurdle: the lender’s own board, which must sign off on the mega-refinancing agreement.
The government reached a staff-level deal with the IMF in early March to replace a failed $57 billion program in 2018 that failed to save the grain-producing country from falling into an economic crisis and a private-sector default .
The IMF’s board of directors will meet in the coming days to give the green light to the deal, which would unlock an initial disbursement of nearly $10 billion, with the clock ticking to a $2.8 billion repayment , which is due early next week and which the country is struggling to afford.
“The next step now is the approval of the IMF Board of Directors. We look forward to multilateral support. It will bring greater stability to Argentina, Latin America and the world,” Secretary of Commerce Martin Guzman said after the Senate vote.
He said that without a deal it would have been “impossible” for the country to repay its obligations to the IMF, adding that the deal – despite opposition from some lawmakers and protesters – was necessary to stabilize the economy.
“In this context of geopolitical conflict that is increasing international food and energy inflation, creating certainty rather than more uncertainty is of particular importance.”
The new program would see the funds disbursed over a 30-month period and a new repayment schedule between 2026-2034. It includes an economic program to reduce the budget deficit, strengthen reserves, cut huge energy subsidies and raise real interest rates.
Not everyone in Argentina has rallied behind the deal, fearing the economic conditions it will bring will put pressure on people who are already struggling with high levels of poverty and inflation that tops 50% annually.
Gisella Lazcano, an activist who protested the deal, called it a “scam” and said the country should not pay back the money, echoing calls from recent street protests.
“Paying off these illegitimate debts is a burden on the shoulders of the working class,” she said.
Congressional approvals have helped give a boost to Argentina’s bonds, which have been languishing in troubled spots despite concerns over whether the country, which is a series offspring, will be able to meet economic targets.
“There is a certain fear associated with the economic situation and the likelihood of concrete measures affecting people’s wallets,” said Esteban Neme of research company Horus.
“People are afraid of the adjustments that the agreement may cause, mainly the impact on the prices of products and services.”
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Argentina: IMF disbursements
Argentina: IMF Disbursements (Interactive Chart)
Argentina: Economic Goals
Argentina: Economic Goals (Interactive Chart)
Argentina US Dollar Bond Rates
Argentine US Dollar Bond Rates (Interactive Chart)
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(Reporting by Adam Jourdan and Walter Bianchi; Additional reporting by Reuters TV; Editing by Tim Ahmann)
https://www.oann.com/next-stop-imf-board-after-argentina-congress-oks-45-billion-debt-deal/?utm_source=rss&utm_medium=rss&utm_campaign=next-stop-imf-board-after-argentina-congress-oks-45-billion-debt-deal Next stop for the IMF board after Argentina’s Congress approved a $45 billion debt deal