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Argentina has requested a $20 billion loan from the IMF as it struggles with dwindling foreign reserves and an ailing currency, Economy Minister Luis Caputo announced Thursday. The country, already the IMF's largest debtor, is also seeking additional funding from organizations like the World Bank and the Inter-American Development Bank (IDB).
President Javier Milei's government announced the preliminary figure amid a run on the peso, prompted by fears of a possible devaluation, that drained reserves by more than $1.2 billion last week.
The proposal must be approved by the board of the IMF, whose spokeswoman Julie Kozack said Thursday that discussions with Argentina, including for a "sizable financing package," were "very advanced." She did not provide a figure for the size of the package.
Caputo said the IMF loan would "not be used to finance expenses" but to recapitalize the Argentine central bank.
Argentina has been a serial defaulter in recent decades, and the IMF has bailed out South America's second-biggest economy 22 times in the past. Self-described "anarcho-capitalist" Milei came to office in December pledging to cut spending, tame inflation and fix a steep fiscal deficit.
In the last six months, the peso has fallen about ten percent to the US dollar.
The new loan will add to the existing $44 billion Argentina already owes the IMF under a deal signed in 2018 for the bank's biggest-ever loan. Argentina has one of the highest inflation rates in the world, but under Milei it has fallen from 211 percent year-on-year at the end of 2023 to 84.5 percent in January. The president has said a new IMF deal will help ensure that "inflation is only a bad memory."
Keeping inflation at bay is Milei's main political capital as the mid-term legislative campaign approaches with his party -- lacking a majority in Congress -- seeking to increase its seats.
