Argentina receives first tranche of $20-B IMF loan
FILE PHOTO: A sign outside a store reads in Spanish “We accept Dollars” in Buenos Aires, Argentina, December 12, 2023. REUTERS/Tomas Cuesta/File Photo
BUENOS AIRES, Argentina — Argentina on Tuesday received an initial $12 billion from a new $20 billion loan agreed by the International Monetary Fund, which the central bank said would be used to boost its reserves.
The South American country has loosened currency controls to receive about $42 billion from the IMF, World Bank and International Development Bank.
The initial $12 billion will increase central bank reserves to nearly $37 billion, the institution said.
READ: Argentina secures new $20-billion bailout from IMF
On Monday, the peso slumped against the US dollar after the government announced an end to six years of currency controls, opting instead to keep the peso within a floating band of 1,000 to 1,400 pesos to the US dollar.
On Tuesday, it remained steady at a rate of 1,230 pesos.
Economic woes
The injection from global lenders is crucial for replenishing Argentina’s meager foreign reserves, reviving growth and tackling inflation — a key focus for self-styled “anarcho-capitalist” President Javier Milei.
A downward trend in month-on-month inflation that started last September was broken in March when prices rose 3.7 percent, compared to 2.4 percent in February.
To cut back on government spending, Milei has fired tens of thousands of public sector workers, halved the number of government ministries and vetoed inflation-aligned pension increases to curb public spending.
Last year, Argentina recorded its first budget surplus in a decade, but the collateral damage has been a loss of purchasing power, jobs, and consumer spending.
Milei has promised that by mid-2026 “the problem of inflation in Argentina will be over.”
