Argentina's President Mauricio Macri has requested the International Monetary Fund for the early release of a bailout package for the country. Argentina had secured a USD 50 billion loan from the IMF earlier this year as the country faced a growing economic crisis.
"Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019," Macri said in a televised address. "We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial programme next year.”
The Argentine peso has lost more than 40% of its value against the U.S. dollar this year and inflation is rampant. Investors are concerned Argentina may not be able repay its heavy government borrowing and could default. Macri’s call to the IMF is specifically to try and stem the slide of investor confidence, "This decision aims to eliminate any uncertainty," he added.
The country has not been able to lower inflation, which is the highest amongst G20 nations. And the government is failing to enact the economic reforms it promised the IMF, most of them aimed at curbing public spending and borrowing.
Argentina had secured the biggest International Monetary Fund bailout in history in June this year as its government needed help to rein in soaring twin deficits in the country and prop up the Argentine peso.
Argentina has had a complicated relationship with the IMF, which has been blamed for worsening the country's economic crisis in 2001. There have been continuous protests after President Mauricio Macri announced that he had approached the IMF for help.
Critics of the government and Argentinians believe that a "full-blown" bailout could push the economy into a deeper downturn through government stipulations, including accelerated budget cuts to public spending. Looking back to the crisis of 2001 , Argentinians say that going back to the IMF means handing over the country, that’s what Macri is doing. Before long they will say that they have to make more adjustments, adjustments for pensioners, selling off public companies, etc.