The Buenos Aires stock exchange soared more than 8.6 percent at opening this morning, on news of the formal approval of the International Monetary Fund (IMF) of a US$50-billion aid package and Morgan Stanley Capital International's (MSCI) decision to upgrade the country officially to an “emerging market."
The IMF's executive board approved on Wednesday the agreement Argentina struck with IMF staff earlier this month. However, vocal street protests and threatened labor strikes have greeted Argentine President Mauricio Macri's decision to seek IMF financing.
Argentina plans to draw on the first US$15-billion tranche of the aid programme, of which half will be used for budget support, while treating the remaining US$35 billion as "precautionary," according to the IMF.
Christine Lagarde, the IMF's managing director, has heaped praise on Argentina's plans for economic reform but insisted the decisions were made in Buenos Aires – and not handed down from the Washington-based fund.
"The approval today is clear evidence of the international community's trust in Argentina's reform drive and support for the government economic plan backed by the fund," she told reporters on Wednesday, which was a public holiday in Argentina.
"This is a plan which was designed and which is owned by Argentine authorities. It takes into account their domestic situation. It is geared towards strengthening the economy for the benefit of all Argentines."
The country has a bitter history with the global crisis lender, which many Argentines view as having imposed tough conditions that worsened economic pain 17 years ago.
The stock exchange also celebrated Argentina's return to the MSCI Emerging Markets Index from mid-2019, according to a statement released Wednesday by the New York-based financial services company.
The MSCI Indices serve as a guide for institutional investors to build their equity portfolio, which is synonymous with investment.