Argentina has successfully received an initial payment of $12 billion as part of the new $20 billion loan agreement with the International Monetary Fund (IMF). The Argentine central bank announced that these funds would be directed towards strengthening the country’s foreign reserves.
In total, Argentina is set to receive approximately $42 billion from the IMF, World Bank, and International Development Bank. The first installment of $12 billion will significantly boost the central bank’s reserves, bringing them to nearly $37 billion.
This financial support comes as Argentina has lifted its stringent currency controls, opting for a floating band for the peso. The government has set the peso’s value between 1,000 and 1,400 pesos to the US dollar. Following this shift, the peso initially weakened but stabilized at 1,230 pesos on Tuesday.
The IMF’s contribution is critical to replenishing Argentina’s dwindling foreign reserves, sparking economic growth, and addressing rising inflation. Argentina’s newly elected President, Javier Milei, a self-described “anarcho-capitalist,” is focused on overcoming inflation as part of his broader economic reforms.
In recent months, inflation showed signs of slowing down, but March saw a jump to 3.7 percent compared to 2.4 percent in February. In an effort to reduce government expenditure, Milei has undertaken drastic measures, including laying off thousands of public sector workers and cutting the number of government ministries.
Despite achieving a budget surplus for the first time in a decade, Argentina faces challenges such as a decline in purchasing power, rising unemployment, and reduced consumer spending. Milei has vowed that by mid-2026, inflation in Argentina will be under control.
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