The IMF’s latest substantial loan to Argentina — a country with a history of defaults now under the leadership of a close ally of Donald Trump – has raised concerns among many of the Fund’s senior decision-makers. It received approval nonetheless. Argentina’s new loan with the International Monetary Fund was approved even though it raised concerns among many of the lender’s senior decision-makers. Approximately 50% of the 25 executive board chairs at the International Monetary Fund expressed significant concerns regarding the US$20-billion deal, as reported by individuals familiar with the situation, who requested anonymity while discussing confidential matters. The credit will be allocated to a nation that is already, by a significant margin, the largest debtor of the Fund — consuming over one-third of its total global lending — and features an unusually substantial US$12-billion portion disbursed upfront.
However, when the board convened to deliberate on the approval in Washington, late on April 11, the bailout had effectively become a fait accompli. The administration of Javier Milei, referred to by Trump as his “favourite president,” disclosed specifics during a press conference in Buenos Aires just hours prior to the official endorsement by the IMF board. The board approved the decision to allow that announcement, as stated by one of the individuals — and any program that reaches the IMF’s highest decision-making body is virtually assured of approval regardless. Nonetheless, the unusual sequencing was merely one of numerous indicators that Argentina received preferential treatment.
According to three individuals familiar with the matter, the deal was perceived by some as being pushed through by the Fund’s management. Some were left with the impression that the decision was influenced more by political considerations than by substantive policy — raising apprehension regarding the precedent established. “The programme for Argentina was approved by the executive board following a very rigorous evaluation,” Rodrigo Valdés, the IMF’s Western Hemisphere director, stated to reporters in Washington when questioned about the story. He stated that the agreement also demonstrated Argentine “authorities’ very strong track record and commitment to stabilisation.”
The context for all this was the global turmoil instigated by Trump, alongside the heightened anxiety regarding his subsequent actions. The US president has mandated a reassessment of the nation’s involvement in international organizations such as the IMF — expected in August — prompting leaders of these institutions to explore avenues to showcase their value to Trump. During its spring meeting this week, the Fund minimized its efforts regarding climate change following US Treasury Secretary Scott Bessent’s critique of the institution for “falling short” of its fundamental role as a lender of last resort and experiencing “mission creep.”
Indeed, Argentina under Milei has exceeded expectations in implementing the policies usually recommended by the IMF, and has achieved notable results. Milei reduced the equivalent of five percent of GDP from the country’s persistent budget deficits, lowered monthly inflation that had previously soared into double digits to below three percent in February — all while decreasing poverty from 53 percent to 38 percent.
Considering Argentina’s history — which includes two IMF programmes in the past six years that ended disastrously — any forthcoming programme would undoubtedly attract heightened scrutiny. In 2025, liquidity is abundant from various lenders based in Washington as well. Shortly after the Fund’s announcement, the World Bank promptly revealed US$12 billion in aid, while the Inter-American Development Bank extended an offer of US$10 billion. “This time, it’s different,” stated IMF Managing Director Kristalina Georgieva during a press conference on Thursday. “This time, there is decisiveness to put the economy on a sound track,” she stated. “Now, the nation is not isolated. We are there.
So is the Secretary of the Treasury of the United States. Bessent traveled to Argentina shortly after the IMF loan was approved – marking only his second international trip during a tenure largely characterized by a global trade conflict. This week in Washington, Bessent reaffirmed his backing for Milei’s administration — initially addressing a private gathering on Tuesday, where he indicated that the US might extend a credit line to Argentina, followed by a Wednesday address that praised Argentina’s IMF program as a benchmark for other nations. “Argentina deserves the IMF’s support because the country is making real progress toward meeting financial benchmarks.” “But not every country is so deserving,” Bessent stated. “The IMF must hold countries accountable for implementing economic reforms.” At times, it is necessary for the IMF to assert a firm ‘no’.”
Within the corridors of the Washington lender, certain board members expressed that they did not perceive that option available for Argentina. Although there were suggestions to abstain, in the end, nations determined that the repercussions of opposing management and the United States would be excessively burdensome, as noted by one individual. Indeed, another source indicated that they did not sense any pressure from management. Georgieva organized informal gatherings of the chairs of the executive board — representatives of IMF member nations — in the weeks preceding the decision regarding the loan to Argentina. On March 25, a variety of options for the frontloaded portion were deliberated, with estimates fluctuating between US$8 billion and US$15 billion. Subsequently, during a lunch on April 2 — to which they received an invitation merely the day prior — the US$12 billion was revealed, accompanied by specifics regarding the suggested new currency framework. According to two sources, some of the chairs perceived the lunch as an attempt by management to persuade them to acquiesce, despite their ongoing reservations.
In the interim, numerous details were emerging, intensifying the pressure on the board to meet what had by then become the market’s expectation, according to three individuals. On March 21, Bloomberg reported that the amount involved was US$20 billion. Economy Minister Luis Caputo specified the figure on March 27, noting that it was contingent upon board approval. The IMF verified that a day later. On March 30, Caputo stated that Argentina had requested over 40 percent of the programme in frontloading. In a Reuters interview on March 31, Georgieva described the 40-percent figure as “reasonable.” The IMF ultimately provided 60 percent.
In Argentina, as the board decision drew near – and despite Milei’s remarkable economic figures – a new surge of market volatility was emerging. Investors faced uncertainty regarding the potential for an IMF deal to coincide with currency devaluation, leading to a decline in the black-market peso. Since then, the relaxation of currency controls under the new IMF plan has proceeded with relative ease. “Now everything looks fine, but if you didn’t grant the programme three weeks ago, the economy was up against the wall,” stated Eduardo Levy Yeyati, chief economic advisor at Adcap Grupo Financiero, a brokerage based in Buenos Aires. “Clearly, the US was in favor of it. However, it appears that the board was unable to identify sufficient justification to sever ties with Argentina, particularly in light of the current global circumstances and the fiscal measures the country has implemented.
The US support of the Argentina loan represented a significant shift. According to multiple individuals familiar with the matter, it had been consistently abstaining in other decisions, citing procedural reasons. The role of undersecretary for international affairs — traditionally associated with the IMF portfolio — remains one of several unfilled positions at Bessent’s Treasury, with Shannon Ding, a seasoned Treasury official, currently serving as an interim representative at the Fund. Nonetheless, that late Friday night, Ding endorsed Argentina’s programme, as reported by the individuals involved.
The primary issue highlighted by the chairs was the significant exposure to Argentina that the Fund would assume, especially given the substantial portion upfront. The nation currently has a debt of US$41 billion to the Fund, with principal repayments scheduled to commence in mid-2026. The debt originates from a loan issued during Trump’s initial term, extended to another pro-market Argentine administration, notably led by a friend of the Trump family, and it continues to represent the largest in the history of the Fund. The situation deteriorated almost instantly, marking yet another episode in the ongoing series of IMF-Argentina misadventures. Inflation soared, the peso plunged, capital fled, the economy sank into recession, and voters booted the government out.
A longstanding worry associated with IMF lending has been that officials could squander any funds they receive in an effort to defend the peso. Bessent minimized that risk in a Bloomberg interview during his recent visit. The substantial reserves currently at Argentina’s disposal reduce the likelihood that intervention will be necessary to support the currency, he stated. Additional concerns expressed by board members encompass the absence of domestic political backing for the programme — Milei opted for an executive order instead of obtaining a congressional majority — the expedited timeline for its endorsement, and inadequate conditionalities considering the extraordinary magnitude of the loan.
According to Brad Setser, a former senior official at the US Treasury, there are risks for the lender in providing such a substantial amount of cash upfront in a programme that fundamentally involves refinancing significant existing debts. “The Fund would be raising its exposure when the peso is clearly overvalued and the country is repaying bonds,” he stated. “It appears that the Fund is effectively establishing itself as the junior creditor.”