Argentina concludes billion -dollar deal with IMF to support economics

The International Monetary Fund promised $ 20 billion to Argentina on Friday night. That money is intended to help the economy of the South American country on top, after other money stocks were almost affected. The Argentinian President Javier Milei said that many of the strict restrictions on capital traffic will be canceled next week, such as the peso linking to the dollar.

The IMF shows that it is confident in Milei’s intended policy to reform the Argentinian economy. The right-wing populist president wants to transform the now strictly regulated economy into a free market economy. Milei’s predecessor arose enormous budget deficits, which led to inflation and a weak peso.

Milei, who won the elections with the promise to prune the budget with a chainsaw back, changed course radically when he came to power. Among other things, he deleted subsidies and government jobs, and had the central bank printed less money. Public spending and inflation decreased, yet poverty and unemployment increased among the population.

Investors have been asking Milei for some time to lift the capital restrictions, but he said to wait until the right moment. Those strict restrictions, which are also called « the clamp » in Argentina, were established in 2019 by an earlier government. They regulated access to dollars for Argentines, creating a black market. Critics of Milei’s policy are now afraid of a devaluation of the peso.

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