International roundup

By Agencies
[email protected]

The International Monetary Fund, Argentina’s biggest creditor, agreed Monday to release the next tranche of loans due under a bailout program, endorsing government austerity measures so severe they even surpass the terms of its $43 billion loan.

The IMF deal follows the completion of its review of Argentina’s compliance record and confirms the next $792 million payment will become available to the government in June, reassuring markets and boosting confidence among bankers about Argentina’s prospects as it goes through its worst economic crisis in two decades.

The decision by the fund’s technical staff still requires final approval from the IMF’s executive board, which could take weeks.

Argentina’s annual inflation rate reached 287% in March, among the highest in the world, deepening poverty and spurring strikes and protests. But the IMF praised President Javier Milei’s libertarian government for a number of economic successes — Argentina’s first quarterly fiscal surplus in 16 years, falling monthly inflation and surging sovereign bond prices.

To overhaul the beleaguered economy, Milei has slashed public sector wages, eliminated thousands of state jobs, frozen public works projects and and cut subsidies. He has also devalued the nosediving peso currency by over 50%, helping it stabilize but causing the prices of basic goods to skyrocket.

Although brutal for Argentina’s poor and middle classes, the market-friendly overhaul has “resulted in faster-than-anticipated progress in restoring macroeconomic stability and bringing the program firmly back on track,” the IMF said, thanking Argentine authorities for “the decisive implementation of their stabilization plan.”

The praise marks a dramatic turn-around from the past six decades during which Argentine politicians showed little interest in enacting reforms stipulated as part of borrowing agreements.

Previous left-leaning governments fell far short of IMF targets and relied on central bank money printing to finance treasury spending, pushing the country’s IMF program — launched in 2018 and refinanced in 2022 — to a breaking point.

The international lender remains deeply unpopular in Argentina, where the public blames it for an economic implosion and debt default in late 2001. The IMF later acknowledged it made mistakes contributing to the collapse.

It’s rare for a country to have the IMF as its biggest creditor. Argentina is in the strange position of relying on money lent by the fund to repay the fund itself.

PERU

Peruvian authorities arrested President Dina Boluarte’s brother and her lawyer Friday over influence-peddling accusations, a day after the South American country’s government disbanded a police unit that assisted prosecutors in investigating the president’s inner circle.

A judge signed off on the arrests, according to a copy of the warrant obtained by The Associated Press. 

The document accuses the president’s sibling of working to appoint government officials in exchange for money and an agreement to gather signatures to register a political party.

The developments mark the latest step in mounting pressure on Boluarte, who became president in December 2022 when she replaced then-president Pedro Castillo. He was dismissed by Parliament and is now imprisoned while being investigated for alleged corruption and rebellion.

The warrant also granted the prosecutors’ request to keep both men incommunicado for 10 days, a legal maneuver that authorities typically reserve for cases they deem highly serious.

Local television stations showed images of the arrests of Nicanor Boluarte and Mateo Castañeda. The Attorney General’s Office later confirmed their arrests on social media.

The president’s brother faces charges of conspiracy and influence peddling for allegedly appointing prefects — local officials who track social conflicts in remote areas — in exchange for money and the gathering of signatures to register the Citizens for Peru party.

“I am innocent,” Nicanor Boluarte told reporters as he left his house handcuffed and wearing sunglasses, a facemask and a baseball cap. He is the second to last of 12 siblings, and the president is the youngest of all.

Prosecutors accuse Castañeda of interfering with the investigation into Nicanor Boluarte by offering certain benefits to members of the now-disbanded police unit, which focused on tax probes.