Argentina is paying the International Monetary Fund with help from Qatar, the latest creative measure by the South American nation to honour its obligations with the IMF as foreign reserves stand near record lows amid a deepening economic crisis.
Qatar is providing a loan equivalent to US$775 million in special drawing rights held with the Washington-based lender, Argentina’s Economy Ministry said in a statement Friday. It will repay the Middle Eastern nation in August once the IMF board approves a US$7.5-billion disbursement that was agreed by Buenos Aires with the Fund’s staff last month.
Argentina owed the IMF US$454 million in regular interest service on August 1, but the total payment grows to US$775 million when surcharges related to the large size of the loan are included. The IMF has supported the country with a record US$44-billion bailout during the administration of Mauricio Macri, but the deal has been renegotiated and refinanced under outgoing President Alberto Fernández.
The Qatar loan is the latest in a series of unconventional measures Buenos Aires has come up with to avoid falling into arrears with the IMF just as Argentines prepare to pick a new president in October. Argentina has already used its own SDRs with the IMF, tapped a currency swap line with China to make payments in yuan, and obtained a bridge loan from a Caracas-based developed bank.
Economy Minister Sergio Massa, who is also running for president in the October election, brokered the refinancing agreement with IMF staff in July, after months of negotiations during which he sought to get more money up front from the Fund.
Argentina is expected to fall into recession this year with annual inflation running at more than 115 percent.