Walter Bianchi & Adam Jourdan

BUENOS AIRES, (Reuters) – Argentina’s debt agreement with the International Monetary Fund of $45 billion has been approved by its Congress. Now, the final obstacle is the lender’s board which must sign the massive refinancing deal.

Early March saw the government reach a deal at staff level with IMF to repair a $57B program that failed in 2018. It was meant to stop the nation’s grain-producing countries from falling into an economic crisis or a default within the private sector.

It is expected that the IMF board meets in the near future to approve the deal. That would enable a disbursement of almost $10 billion and the clock will tick ahead to a $2.8 million repayment, due next week.

The next step will be the approval by the IMF board. Multilateral assistance is something we look forward to. “It will bring more stability Argentina, Latin America, and the globe,” said Economy Minister Martin Guzman after the Senate vote.

According to him, it was impossible for the country not to reach an agreement to repay its IMF obligations. He added that the deal was needed to stabilize the economy – in spite of protests from lawmakers.

“In these times of geopolitical conflict, which raises global inflation in food & energy, it’s of special importance to provide certainty instead of more uncertainty.”

Graphic: Argentina: IMF payouts: https://graphics.reuters.com/ARGENTINA-IMF/zjvqkooqgvx/chart.png

Funds would be disbursed over 30 monthly periods and there would be a new payment schedule for 2026-2034. The economic program includes plans to decrease the fiscal deficit, increase reserves, reduce huge energy subsidies, and raise real interest rates.

Not all Argentinans have embraced the deal. They are concerned that any economic strings could put undue pressure on already hard-hit people who struggle with poverty and high inflation.

Gisella Laszcano is an activist against the deal. She called it a scam and demanded that the country not return the money. This echos calls made in the recent street demonstrations.

She stated that “the payment of this illegitimate credit is a burden on our shoulders,”

Graphic: Argentina’s USD bonds: https://graphics.reuters.com/ARGENTINA-ECONOMY/BONDS/jbyvrbrzrve/chart.png

Despite concerns that Argentina, a frequent defaulter, would be able meet its economic goals, the congressional approvals helped to buoy Argentine bonds.

Esteban Neme of research company Horus stated that “there is a certain degree of fear related to the economic condition and the likelihood of concret measures that affect people’s wallets.”

People fear the price adjustments and other consequences of this agreement.

Graphic: Argentina: Economic Targets: https://graphics.reuters.com/ARGENTINA-IMF/gkplgajrovb/chart.png