(Bloomberg) -- President Javier Milei said Argentina will “certainly” strike a deal with the International Monetary Fund by the end of the year, outlining the first inkling of a new timeline for negotiations.
Milei’s one-word response to Bloomberg News happened as he was coming out of a bilateral meeting with French President Emmanuel Macron in Paris where both leaders will attend the Summer Olympics opening ceremony later Friday. The comment also came after Economy Minister Luis Caputo held a “constructive meeting” with IMF Managing Director Kristalina Georgieva Thursday.
A new IMF agreement is a key requisite for Milei’s government to lift capital controls, return to international markets and get the recession-prone economy back on track.
Milei hopes to replace the current $44 billion IMF program — the Washington lender’s largest — with a new program that could include more money not just to pay back the IMF but to lift capital controls. The strict controls in Argentina makes it near impossible for companies or individuals to move dollars outside the country and discourage investment amid a deepening recession.
While the Fund has expressed confidence in Argentina’s economic path, it has long insisted on a more flexible exchange rate. Today, the official exchange rate lags far behind monthly inflation due to the government’s currency controls, prompting economists to say the peso has become overvalued. To fight the widening gap between the official and the parallel rate, Argentine officials have begun intervening in currency markets, another practice typically frowned upon by the Fund.
©2024 Bloomberg L.P.
