The International Monetary Fund (IMF) has agreed to increase the size of Argentina’s bailout fund as part of an effort to help restore investor confidence in the country and protect its currency from sliding down further.
Under the new agreement, the international bank will provide US$57.1 billion instead of the US$50 billion announced previously. Moreover, nearly US$50 billion will be released by the end of 2019.
President Mauricio Macri says he wants to use the financing to balance the budget. Meanwhile, thousands of people, particularly politicians and social activists, are staging protests across the country, saying the credit from the international bank might plunge the country deeper into the crisis.
Many Argentinians are against the IMF, because it brings back memories of the austerity imposed after earlier bailouts.
“Argentina has had a difficult history with the IMF, austerity and predatory vulture hedge funds. We don’t want history to repeat itself,” stated Eric LeCompte, Executive Director of the religious development group Jubilee USA, in a press release.
Whatever the history or the opposition, the government has no option but to seek loan from the IMF, with its currency falling on the back of rising interest rates in the United States.
With a drought hurting its agricultural exports, Argentina’s foreign currency reserve has shrunk significantly.
Alarmed foreign investors are pulling money out of the stock market, leaving the government scrambling to fix the economy.