The International Monetary Fund (IMF) has agreed to provide a three-year $50 billion stand-by agreement (SBA) to Argentina to help boost the Latin American nation out of a currency crisis. The amount is the largest ever standby loan in the lender’s history, but the agreement must get an approval by the IMF’s executive board before June 20.

Argentina, which has been plagued by economic problems in recent years, had asked for help from the IMF to tackle the peso downfall. On Thursday, the Argentine Peso plunged 25 percent versus the U.S dollar at 24.9850 per dollar.

As stipulated in the terms of the agreement, Argentina has agreed to curb its fiscal deficit to 1.3 percent of gross domestic product in 2019, down from the previous 2.2 percent. The government data showed that the country’s debt hit $321 billion in 2017, 57 percent of the country’s GDP, a 33.3 percent increase from when president Mauricio Macri resumed office in late 2015.

“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,” said Christine Lagarde, the IMF Managing Director in a statement.

The country will need to lower inflation rate to 17 percent by 2019, 13 percent by 2020, and 9 percent by 2021, said Argentina’s Financial Minister Nicolas Dujovne. As of May 11, Argentina’s inflation rate stood at 25.4 percent, exceeding the government’s estimate of 15 percent.

Argentinians had a bitter experience with the IMF due to the austerity package imposed on the country following the worst economic crisis in 2001-2002, forcing the nation into default.

The Argentine Peso is not the only currency facing depreciation

Other currencies facing default are the Turkish Lira and the Indonesian Rupiah. The depreciation of these currencies cannot be separated from the gradual hike in the Fed benchmark rate.

The gradual increase in the Fed Fund Rate forced emerging markets to experience capital outflow. As a result, the demand for the U.S dollar soared, and many countries have begun to face currency depreciation. Investors first saw these outflows in May and June of 2013 with the so-called “taper tantrum” episode, where random capital outflows severed emerging markets’ economy.

Other emerging markets central banks have increased the interest rate to stabilize currencies. As of May 4, the Argentine central bank raised the interest rate to 40 percent, three times in eight days.

How will the IMF package impact the country’s economy?

The word “Fund” brings back a bad memory to Argentinians, as the Washington-based creditor’s attempt to save the peso in 2001 did not solve the crisis but sank the country to the disastrous economic disaster instead.

“When you talk about the IMF in Argentina, you are talking about a crisis,” Carlos Germano, a political analyst said.

The IMF’s austerity measure forces governments to cut public spendings on social programs, which triggers anger in Argentina and Greece. The deal still allows the country to spend on welfare programs if deemed necessary.

Despite being a popular figure who can win the hearts of the parliament and labor unions, Macri has struggled to handle the inflation problem, inherited from the 13-year Kirchner regime. Now, Macri seems to have no choice other than seeking the IMF’s help. But, is he ready for the consequences?

Cuba Appoints Raul Castro Head of Commission to Overhaul Constitution