Argentina’s Javier Milei Issues Decree to Secure IMF Loan, Sidestepping Congress

Argentina’s President Javier Milei signed an executive decree securing a loan from the International Monetary Fund (IMF). The move preapproves a forthcoming agreement with the IMF, effectively shielding it from potential derailment in the country’s opposition-dominated Congress.

Milei’s office confirmed that the decree fulfills a legal obligation under a 2021 Argentine law, which mandates congressional approval for new or expanded IMF loans. This maneuver underscores the libertarian leader’s determination to finalize a deal essential to his ambitious economic agenda.

The decree, which can only be overturned if both houses of Congress vote against it, allows Milei’s administration to ink the loan agreement as soon as negotiations wrap up. Government officials have expressed optimism about concluding talks by the end of April, signaling that a staff-level agreement with the IMF could soon follow, pending formal approval from the fund’s board a process typically spanning several weeks.

Why the IMF Loan Matters to Milei’s Vision

Milei has been vocal about the urgent need for fresh IMF funds, which he views as important for stabilizing Argentina’s faltering economy. The country currently owes the IMF over $40 billion, a debt rooted in a 2018 loan refinanced in 2022 after contentious congressional battles.

The president has pegged the new loan’s value at approximately $11 billion, funds he says are vital to replenishing the central bank’s critically low foreign currency reserves. However, this new loan will make Argentina one of the fund’s largest debtor. IMF loans come with higher costs and foreign currency repayment obligations, exposing Argentina to exchange rate volatility.

According to Milei the funds will serve dual purposes; repaying the IMF itself and settling dollar-denominated treasury debt held by the central bank.

Milei contends this approach will ultimately lighten Argentina’s overall debt load, a claim that has sparked debate among analysts given the country’s complex financial history with the IMF.

Argentina faces $29.6 billion in foreign currency payments in 2025 (5% of GDP), including $2.9 billion in IMF interest. Without sustained fiscal surpluses or access to international capital markets, repayment relies heavily on economic growth and reserve accumulation

A Controversial Shortcut Around Congress

The use of an executive decree to greenlight the IMF loan has raised eyebrows in Argentina, where the multilateral lender remains a polarizing figure. Historically, IMF agreements have faced fierce resistance, as seen in the 2022 refinancing debate, which required approval from both congressional chambers under the 2021 law.

By sidestepping this process, Milei aims to expedite negotiations and avoid a repeat of past legislative gridlock. However, analysts warn that this tactic could ignite controversy in a nation still wary of the IMF’s influence, particularly given its association with economic austerity and past crises.

Milei’s administration has hinted that negotiations are being finalized. The president recently stated that his team and IMF technical staff have “defined the programme and the amount,” with the fund now consulting its board ahead of a staff-level agreement.

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