Congress upholds Milei’s decree to back new IMF-Argentina deal

Argentina’s lower house of Congress upheld President Javier Milei’s emergency executive decree backing a new deal with the International Monetary Fund, a key legislative step that clears the way for a formal announcement on the details of a future programme.

Lawmakers in the Chamber of Deputies voted 129-108 in favour of the new deal, with six abstentions, on Wednesday. That cements the decree into law as such orders only need approval from a single congressional chamber to go into effect. 

Argentina needs congressional sign-off to enter into a new IMF programme and negotiations with the Washington-based lender are still underway. Key details, however, remain under wraps.

Expectations for a change in currency policy under a new programme have heightened recently, sending the Argentine peso to its lowest in more than five months on the parallel market this week. In an effort to calm market sentiment, Economy Minister Luis Caputo gave an interview to local media Tuesday, but declined to comment on future policy changes.

As lawmakers debated Milei’s decree inside Congress, protesters marched outside in front of armed security. For months, retirees have carried out weekly demonstrations against low pensions and those demonstrations took a violent turn last week as rowdy football fans joined in. The government’s aggressive response on March 12 resulted in serious injuries and more than 100 people detained.

Milei’s government argues that because the IMF programne will be used to pay down the Central Bank’s obligations to the Treasury, the loan will actually reduce the country’s debt load. It also says the country’s grave economic situation justifies borrowing from the Washington-based lender by decree instead of obtaining full congressional approval.

Argentina is the Fund’s biggest debtor and a new deal would be its 23rd such accord — the most by any country.