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Tuesday, May 24, 2022

Argentine Senate approves IMF agreement; now vote directory

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(Bloomberg) — Argentina’s Senate unveiled the government’s $45 billion deal with the International Monetary Fund on Thursday, paving the way for its final approval by the entity’s executive board.

With 56 in favor, 13 against and three abstentions, the senators approved the legislation that supports the latest IMF program in Argentina after a marathon session that ended after 11 pm in Buenos Aires. The plan will now have to be voted on by the IMF’s executive board to take effect. A date for the meeting has not yet been set, IMF spokesman Gerry Rice said on Thursday.

If the IMF board votes to approve it, the agreement would end after two years of negotiations with technical staff, and would be the country’s 22nd agreement with the multilateral entity. The plan allows Argentina to refinance the next payments due to the IMF after a record rescue granted in 2018 to the previous government that did not modify to stabilize the economy.

The date of the board’s vote will be key to determining whether the country falls into default with the multilateral creditor. The country must make payments of some US$2.8 billion by March 22 at the latest. Once the board approves the deal, Argentina will almost immediately receive about $9.8 billion from the IMF. The rest of the disbursements are conditional on Argentina meeting the program’s objectives, which are evaluated during quarterly reviews with IMF staff.

President Alberto Fernández’s unusual move to get the legislature to vote on the deal exposed a split with opposition lawmakers and within his own leftist coalition.

The bill was approved in the Chamber of Deputies of Congress last week after lawmakers modified the text to vote only on IMF financing, but not on the government’s economic policies in the program.

Economists have already pointed out that the deal’s projections will be difficult to meet, even before it is finalized. Authorities forecast that annual inflation this year will cool to between 38% and 48% from the current level of 52%. But banks such as JPMorgan Chase & Co. are now projecting inflation of more than 60% this year in Argentina due to factors such as rising global food and commodity prices.

original note:

The Senate of Argentina approves an agreement with the IMF, now it goes to a vote of the board

(Update with graphics)

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