Argentina’s government will repay the International Monetary Fund (IMF) this Friday with a $775 million loan from Qatar.
The South American country is facing severe economic crisis along with inflation. With the central bank’s reserves dwindling, the country has to make payments to the IMF.
Argentina needed to avoid a default with the fund, which had $2.6 billion in maturities on Monday and about $800 million due on Tuesday.
Argentina will not use “one dollar of its reserves” to pay the IMF, the country’s Economy Minister Sergio Massa said on Monday.
A presidential decree states that the IMF’s variable interest rate on Qatar’s debt will apply to SDRs (IMF currency), which is currently 4.033% per annum.
It said the funds would fund Argentina’s maturity date with the IMF (for charges and surcharges) on August 4, 2023.
Masa also confirmed on Monday that the payment would be made with a $1 billion bridge loan from regional development bank CAF and $1.7 billion from the second tranche of a swap with China, a move recently announced to the IMF in June. has been made to complete part of the payment.
“I want to give you peace of mind – Argentina will not use one dollar of its reserves to pay off today’s maturity,” Massa said in a televised speech.
The challenge now for Argentina, he added, “is to continue to take care of (foreign currency) reserves while maintaining the level of economic activity.”
