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ECONOMY | 11-03-2022 09:24

Argentina’s IMF deal bill passes in lower house, heads to Senate

In early hours of Friday morning, Argentina's lower house of Congress approved bill underpinning government’s US$45-billion agreement with the IMF.

Argentina’s lower house of Congress approved Friday a bill that underpins the government’s US$45-billion agreement with the International Monetary Fund, a key step toward final approval.

In a 200-37 vote, with 15 abstentions, members of the lower house voted in favour of the deal after a marathon session in congress that ended past 3am in Buenos Aires. The bill will head to the Senate in the coming days, and if approved by lawmakers, goes to the IMF’s Executive Board to become final.

After two years of negotiations, the cash-strapped government aims to close a deal before a March 22 payment to the IMF comes due and avoid a potential default with the Washington-based lender. 

President Alberto Fernández’s unusual step of making the legislature vote on the agreement exposed a divide with opposition lawmakers and within his own left-wing coalition. Key lawmakers from Fernández’s broad bloc criticised his negotiation strategy and came out against the deal. His government ultimately conceded on changes to the text this week in order to win over more opposition support. 

With a fragmented ruling coalition, the vote in congress was the government’s way of showing the IMF that the deal has ample political ownership, a top requirement for such agreements.

The agreement would be Argentina’s 22nd with the IMF and the latest chapter in a tumultuous relationship. The new loan seeks to refinance payments Argentina owes the Fund stemming from a record bailout to the nation in 2018 that failed to stabilise the economy at the onset of a recession.

by Patrick Gillespie, Bloomberg

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