President of Argentina: “We seek a new agreement with the IMF”

Milei is aiming for $15 billion to lift capital controls.

Gabriel Micillo•Friday, March 15, 2024•2 min read

Milei is aiming for $15 billion to lift capital controls.

President Javier Milei confirmed that he will seek to obtain $15 billion to lift capital controls through a new agreement with the International Monetary Fund (IMF) and further borrowing from private creditors.

Although his intention is to lift the restrictions as soon as possible, he prefers to proceed “with caution” and “aim for mid-year,” in line with the IMF’s estimates, which are monitoring the country’s situation within the framework of the debt agreement.

“We are working on a new agreement, and if the conditions are met, we will sign it. We are in a very favorable situation,” he said regarding a new agreement with the IMF, while revealing that “we are accelerating the acquisition of funds from private sources to expedite the lifting of the capital controls.”

The lifting of capital controls was discussed with the number two at the International Monetary Fund, Gita Gopinath, in the meeting she held weeks ago with the President. On that occasion, the economist raised to the President the reluctance of the multilateral organization to support dollarization.

Those familiar with the inner workings of the IMF point out that this alternative “is not within the Fund’s manuals,” and therefore supporting this initiative would pose a high political risk for the current technical leadership of the organization. It is worth noting that more than one high-ranking official at the Fund saw their career frustrated following failures in handling the Argentine case.

Nevertheless, the IMF is “amazed” by the decisiveness of the adjustment that Argentina is undertaking, comments from the capital of the United States suggest. It must be considered that it is not only about reducing the Treasury deficit, about five percentage points of GDP, but also about an equivalent reduction in the quasi-fiscal deficit, where the cut reaches 10% of GDP.

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ABOUT THE AUTHOR See More

Gabriel Micillo

Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.