The decision is welcome news to Argentinian President Javier Milei as he continues his reformation of the indebted South American nation.
The International Monetary Fund (IMF) said it has reached a preliminary agreement with Argentina for a $20 billion bailout on Tuesday.
In a statement, released on its website, the IMF said: “The agreement builds on the authorities’ impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators.
“The program supports the next phase of Argentina’s homegrown stabilization and reform agenda aimed at entrenching macroeconomic stability, strengthening external sustainability, and unlocking strong and more sustainable growth, while also managing the more challenging global backdrop.”
Argentinian President Javier Milei, who has cut inflation and stabilized Argentina’s troubled economy with a free-market austerity agenda, posted the IMF’s statement on social media platform X along with a photograph of him embracing Economy Minister Luis Caputo.
He captioned the picture “VAVOS CARAJO!”—apparently misspelling the word “Vamos!”—in a statement that loosely translates into English as “Let’s go, damn it!”
Milei’s policies have reversed the borrowing of previous governments, which had left Argentina with a reputation for defaulting on its debts.
Buenos Aires has received more IMF bailouts than any other capital, racking up 22 IMF loans since 1958, leaving the nation owing the fund more than $40 billion, which it agreed to refinance in 2022.
Most IMF funds sent to the country have previously been used to repay the organization itself, giving it a questionable reputation among Argentines, with many blaming the lender for the country’s economic issues, both present and past.
The funds come at a critical time for South America’s second-biggest economy, as pressure had been mounting on Argentina’s depleting foreign exchange reserves as the government tightened rules on money-printing and decimated its supply of U.S. dollars to prop up the peso, which is pegged to the dollar.
Fears had been mounting that if the government had failed to secure an IMF loan, Milei’s austerity measures would be forced off-track and leave the nation, once again, unable to cover its huge debts or pay its import bills.
By Guy Birchall
