In a context of high financial volatility, the government of Javier Milei in Argentina faces serious economic difficulties as it seeks to stabilize the peso against the dollar. In an attempt to stem the depreciation of the local currency, the Central Bank sold 1,110 million dollars in three days. Despite reiterating that it will not modify its economic plan, the Argentine government is negotiating with the Trump administration a loan from the United States Treasury to cover debt maturities totaling 8.5 billion dollars. This move comes after having secured a $20 billion bailout with the International Monetary Fund in April. In addition, Milei admitted that he is seeking a new loan to meet debt payments of 4,000 million in January and 4,500 million in July, as he prepares for the legislative elections on October 26.
The economic situation has been exacerbated by a recent electoral defeat in Buenos Aires Province and by the limits imposed by Congress on the president's vetoes. This has increased pressure on the foreign exchange market, driving the dollar to reach the IMF agreement's ceiling, forcing the Central Bank to sell foreign currency to contain the exchange rate. Despite the turbulence, Milei minimizes the impact on retail inflation and attributes the instability to the political opposition, while economists criticize the Government for not having strengthened reserves previously and for maintaining an artificially cheap dollar. Ahead of the upcoming elections, the government remains firm on its economic program, while senior officials assure their commitment to the current plan and rule out changes in the short term.
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