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Argentina’s Milei Seeks to Use IMF Deal to Curb Inflation
March 10, 2025
Argentina’s President Javier Milei announced that the new IMF agreement aims to restore the central bank’s (BCRA) assets and eliminate inflation. The deal is currently awaiting approval from the IMF executive board. Argentina hopes to conclude the deal in the first quarter of the year, with estimates from local media reports and Wall Street analysts ranging between $10-20bn. Milei had previously blamed inflation on excess money supply, partly caused by the deterioration of the BCRA’s assets. Under the agreement, funds from the IMF will be used by the Treasury to settle part of its obligations with the BCRA, thus reducing inflation. Economy Minister Luis Caputo confirmed that the program and loan amount have been agreed upon with IMF staff. Milei plans to pass the agreement via decree rather than through Congress. His austerity measures are considered to have contributed in reducing inflation in Argentina, from its peak in 2023, as well as Argentina’s first budget surplus in 14 Years.
Argentina’s dollar bonds have trended higher with its 5% 2038s up by 0.9 points to 67.8, yielding 7.9%.
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