The Argentine Chamber of Deputies has approved a decree authorizing the government to negotiate a new agreement with the International Monetary Fund (IMF) to secure additional funding. The approval, achieved with 129 votes in favor, 108 against, and six abstentions, empowers President Javier Milei to proceed without Senate debate. The agreement aims to stabilize markets and advance capital market liberalization as the country addresses its $44 billion debt with the IMF. This decision faced protests from opposition groups, unions, and social organizations opposing Milei’s policies, particularly pension adjustments. The Buenos Aires stock exchange responded positively, with the S&P Merval index rising by 4.52%, and sovereign debt increasing by 0.4%. Reuters
President Milei secured congressional backing to negotiate a new loan with the IMF, aiming to strengthen Argentina’s weakened economy amidst financial uncertainty. The decree allows for borrowing without specifying amounts, following a previously unsuccessful attempt due to legislative disputes. Concerns have arisen regarding the decree’s legality and transparency. The government seeks between $10 billion and $20 billion from the IMF to stabilize central bank reserves and eliminate currency controls, amid market skepticism.
The Argentine Congress is debating and expected to vote on a potential new agreement with the IMF, a critical step for the country’s financial stability. Argentina, with negative net foreign currency reserves after years of economic challenges, is the IMF’s largest borrower. President Milei’s administration argues that a new agreement is essential to bolster central bank accounts and progress toward lifting capital controls in place since 2019. Despite a minority position in Congress, the government anticipates sufficient support, though austerity measures have increased poverty rates and sparked protests, particularly among pensioners.
Fears of a potential peso devaluation have led to increased currency hedging operations, with the market awaiting details of the anticipated IMF agreement. The central bank (BCRA) sold $745 million over three days to meet investor demand. While the market showed signs of easing, futures contracts indicated expectations of an upcoming devaluation. Under President Milei, the gap between official and alternative markets has narrowed significantly. The anticipated IMF agreement is expected to stabilize markets and facilitate capital market liberalization. The Argentine stock market and sovereign debt showed improvements, with the S&P Merval index rising by 3% and country risk decreasing.
The Chamber of Deputies debated a decree authorizing the government to finalize an agreement with the IMF for new funding, coinciding with a mass protest against the administration. The agreement aims to stabilize markets and advance capital market liberalization. Due to a minority in Congress, the government opted for a decree, requiring ratification by one parliamentary chamber. Opposition figures expressed critical support for the decree. The debate occurred ahead of demonstrations against pension adjustments implemented by Milei. A previous protest resulted in clashes with police, causing injuries and arrests. Economic uncertainty and the lack of an IMF agreement have led to a decline in the peso’s value.
As of March 20, 2025, the informal or blue dollar rate in Argentina stands at 1,245 pesos for buying and 1,265 pesos for selling, reflecting a 1.17% decrease from the previous trading session. The blue dollar rate, operating outside official channels, often serves as a barometer of public confidence in the peso and the broader economy.