Argentina has received the biggest loan package ever from the International Monetary Fund, aimed at shoring up the country’s ailing finances: a whopping $57.1bn that will be disbursed over the next three years. The loan – $15bn of which has already been received by Argentina – comes with stringent conditions, including a commitment to a zero deficit for 2019.
Argentina had initially secured $50bn in a deal worked out in June after the South American country was battered by a currency crisis, a run on the peso and double-digit inflation. The economy minister, Nicolás Dujovne, said that at the last minute the IMF agreed to increase the lending package by $7.1bn.
The agreement will only allow Argentina’s central bank to intervene to stabilize its currency if the peso depreciates below 44 pesos to the dollar. It is currently at 39 pesos to the dollar after losing 50% of its value since the start of the year.
The deal was announced just a day after the president of Argentina’s central bank, Nicolás Caputo, resigned unexpectedly, reportedly after disagreements with the IMF’s guideline limiting the bank’s future intervention to rescue the peso. Thousands of Argentinians joined in a nationwide strike on Tuesday to protest against economic turmoil and Mauricio Macri’s austerity measures.
Most Argentinians blame the international lending institution for encouraging policies that led to the country’s worst economic crisis, in 2001, which pushed millions into poverty. The IMF has admitted it made a string of mistakes that contributed to the economic implosion.