Argentina government publishes decree backing new IMF program
BUENOS AIRES, March 11 (Reuters) - Argentina's government formalized a decree of necessity and urgency (DNU) on Tuesday in a key step towards sealing a new International Monetary Fund (IMF) program, according to the document published in the official gazette, opens new tab.
The decree, part of a strategy by libertarian President Javier Milei to help the IMF plan get through Congress, is the most concrete sign yet that a deal is close, which would help the embattled country meet its debts and end capital controls.
The decree said that the program would involve a repayment period of 10 years with a grace period of four years and six months. It added that the new funds received would be used to pay off the Treasury's debt with the central bank (BCRA).
It did not give the size in dollars of the new program.
Argentina is the IMF's largest creditor and has a mottled history with the Washington-based lender. The South American grains producer has had 22 programs with the fund, including a recent $44 billion program that it is still repaying.
Milei's government has imposed tough austerity that has helped overturn entrenched fiscal deficits and brought down triple-digit inflation, but central bank reserves remain negative on a net basis, limiting the government's firepower.
In the decree, the government said that net reserves had been negative $11.2 billion in December 2023 when Milei came into office and had improved by some $7 billion since, suggesting they remained around $4 billion in the red.
New IMF funds would help bolster that balance and potentially pave the way for Milei to undo capital controls in place since 2019, which skew business and trade.
The decree marks a change from the normal process for new IMF programs, which would usually be sent in the form of a bill to Congress. A decree only requires support from one chamber of the legislature, making it easier to get approved.
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