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ARGENTINA | 06-11-2023 15:41

Argentina pays US$840 million in interest to International Monetary Fund

After dealing a debt maturity with the IMF in the amount of US$2.6 billion last week, Argentina will now cancel a further US$840 million in quarterly interest with the multilateral lender.

After dealing a debt maturity with the IMF in the amount of US$2.6 billion last week, Argentina will now cancel a further US$840 million in quarterly interest with the multilateral lender.

Economy Minister Sergio Massa confirmed that on Monday, or Tuesday at the latest, the Central Bank will wire to the IMF, by indication of the National Treasury, the necessary funds to fulfil that obligation in a timely fashion.

Foreign exchange analysts expect this new commitment to be cancelled with yuan available from the swap with China, which allowed the team headed by Sergio Massa to avoid an even stronger devaluation than the 22 percent applied last August, after the primary elections.

This payment of the maturity with the IMF will be finalised less than two weeks from the election to define the next president of Argentina for the period 2023-2027, between Massa (Unión por la Patria) and Javier Milei (La Libertad Avanza).

Obligations with the Fund this year will not be fully cancelled this week, since another principal payment of some US$900 million still has to be faced by the end of the year.

That payment must be made by the next president, since in the timetable agreed upon with the Fund the date is December 21, and the new administration will be inaugurated on the 10th, eleven days before.

Given the insufficiency of dollars and SDRs (the currency used by the Fund), the currency swap agreement with China is now central to the financing of imports and the foreign debt.

After the last principal payment, gross reserves fell to US$21.8 billion, the lowest level since 2006.

The Government announced two weeks ago the expansion of the swap and the activation of a new freely available section in the amount of US$6.5 billion.

The interest paid to the IMF have been increasing year after year given the rise of international interest rates.

 

– TIMES/AFP

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