IMF Board approves US$ 7.5 bn disbursement for Argentina

IMF Board approves US$ 7.5 bn disbursement for Argentina

It will be the “second largest disbursement in the history of the IMF,” Massa explained

The International Monetary Fund’s (IMF) board of directors Wednesday approved a US$ 7.5 billion disbursement for Argentina, the South American country’s Economy Minister and presidential candidate Sergio Massa announced from Washington DC. The decision was adopted unanimously, it was also explained.

The “second largest disbursement in the history of the IMF” will help Argentina pay back loans from Qatar and the CAF used to meet maturities with the IMF before the approval of the fifth and sixth revision of the Extended Facilities Agreement (EFF) with the IMF was formalized.

After these expenditures, some US$ 3.4 billion would be left for the country’s reserves, to which US$ 3.7 billion will be added to bolster the US$ 1,731 million acquired by the Central Bank (BCRA) in the last 20 days after new measures were announced on imports and foreign currency exchange.

Of the US$ 7.5 billion, US$ 2.5 billion will be to cover loans made by China, of which some US$ 1.3 billion will go to the repayment of the “swap with that country,” it was also explained. Another US$ 500 million will be used to repay the loan granted by Qatar and US$ 1 billion will go to the CAF-Development Bank of Latin America.

Wednesday’s announcement was made after Massa met with US officials, including Deputy National Security Advisor for International Economics Mike Pyle and Latin America Advisor Juan González. Joining Massa was Argentina’s Ambassador to the United States, Jorge Argüello.

“If I am President, I would try to pay the IMF to get it out of the way,” Massa was quoted as saying recently. He also pointed out Wednesday that the new disbursement guarantees a “framework of stability” ahead of the upcoming Oct. 22 elections and the Nov. 19 runoff, if necessary.

Massa explained that this was the “second largest disbursement in the history of the IMF.”

”Above all (the disbursement) gave us the possibility of recovering part of what was destined to the payment of the June maturities (of debt), which in some way strengthens and increases the reserves of our Central Bank,“ he added after a meeting with IMF Managing Director Kristalina Georgieva.

”For the first time, the program admits the Central Bank’s intervention capacity in a band program that only the Fund’s ‘staff’ and the Argentine economic team know and work on, to guarantee the normal functioning of the stability of financial dollars in Argentina,” Massa also underlined. He also stressed that the fiscal deficit target of 1.9 percent of the Gross Domestic Product (GDP) contemplated in the program was ratified, but the reserves target “changed” and a procedure “for the revision of the monetary targets” was defined.

“We understand that Argentina must maintain a serious and healthy relationship with the International Monetary Fund, but we must not accept impositions that hurt or damage the reality of the Argentine people,” the Minister also pointed out.