Milei signs executive decree to back Argentina’s IMF programme

President Javier Milei signed an emergency executive decree Monday to mandate a new deal between Argentina and the International Monetary Fund, signalling that a staff-level agreement is closer than ever.

Under Argentine law, Congress has to approve of any new IMF programme. But rather than send lawmakers a bill for their approval, as his predecessor did, Milei issued an executive order that will go into effect unless it is overturned by both chambers of Congress. Approval in a single chamber will also cement it into law.

The government argues that because the funding will be used to pay off the Central Bank’s debt to the Treasury, the loan will actually reduce the country’s debt load. It also said the country’s grave economic situation justified borrowing from the IMF by decree instead of obtaining congressional approval.

Negotiations over a new programme are still underway, although the executive order sends a strong signal they’re nearing their end. In a recent interview, Economy Minister Luis Caputo said his team and IMF staff had already agreed on a sum and programme details, but that the new agreement still had to be approved by the fund’s executive board. He also said that the programme would be finalised by the end of April.

Argentina is the fund’s biggest debtor and a new deal with the fund would be its 23rd such accord, the most by any country with the international lender.

The new programme holds the key to Argentina’s ability to lift capital controls, which would draw much-needed investment into the country. Asked whether a rejection in Congress would be frowned upon by the IMF, chief spokeswoman Julie Kozack said the process was a matter of local law.

“Strong ownership and broad support are key to the programme’s success. Here I want to emphasise, though, that securing congressional support is a decision of the authorities as legislated in Argentine domestic law,” she said during a regular press conference last week.