Argentina has struck a deal with the International Monetary Fund (IMF) for $50bn (£37.4bn) after the peso tumbles, paralysing the economy.
The two parts agreed on a three-year stand-by lending agreement (SBA), subject to IMF board approval, after Argentina requested IMF assistance on 8 May when its currency declined.
Argentina's government agreed in the deal to reduce the fiscal deficit despite authorities predicting lower growth and higher inflation in the coming years.
Christine Lagarde, managing director of the IMF, said: “At the core of the government's economic plan is a rebalancing of the fiscal position. We fully support this priority and welcome the authorities' intention to accelerate the pace at which they reduce the federal government's deficit, restoring the primary balance by 2020.”
“This measure will ultimately lessen the government financing needs, put public debt on a downward trajectory and as President Macri has stated, relieve a burden from Argentina's back.”
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As a result of the deal, the public is protesting around the country as many still blame the IMF for a severe financial crisis in Argentina in 2001 and 2002, causing the country to shun the IMF for years.
Nicolas Dujovne, Argentina's treasury minister, said that the IMF board would most likely approve the deal on 20 June, at which point 30 per cent of the funding to be handed over.
“There is no magic, the IMF can help but Argentines need to resolve our own problems,” he said in a press conference.
The South American country will be expected to pay back the loan, at an of 1.96-4.96 per cent, in eight quarterly instalments, with a granted three years of grace.
The Argentinian central bank, led by governor Federico Sturzenegger, will abandon its 15-per-cent inflation target for 2018 and will not be targeting a particular level.
It will however have to bring inflation down to nine per cent in 2021, compared to the current level of 25 per cent.
Lagarde continued: “In sum, I believe that Argentina's reforms deserve the support of the IMF and the international community and I look forward to soon discussing Argentina's request for support with the IMF's executive board.”