Loan payment

Argentina set to repay $1.9 billion IMF loan on Wednesday – source

BUENOS AIRES, Dec 21 (Reuters) – Argentina will pay $1.9 billion to the International Monetary Fund (IMF) on Wednesday as it rushes to revamp a failed loan deal from 2018, a source close to the government said knowing the situation directly. told Reuters on Tuesday evening.

The payment will be made with funds Argentina has received from the IMF’s Special Drawing Rights (SDR) program, aimed at helping members combat the economic impact of the coronavirus pandemic. The same mechanism was used by the grain-exporting country to contribute nearly $1.9 billion to the fund three months ago.

“Yes, the payment will be made. The December and September payments are twins. The institutional framework for both payments is the same,” the source said.

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A government spokesman could not be reached for comment late Tuesday evening.

As Argentina’s economy emerges from a recession that began in 2018, the year the previous administration signed an ill-fated $57 billion relief loan deal with the IMF, it continues to struggle with inflation. more than 50% per year.

Argentina is seeking to refinance some $45 billion it still owes from the 2018 pact.

The two sides have been in talks for more than a year, but hopes have risen recently for a deal and agreement on a medium-term economic plan, essential to restore Argentina’s credibility in the bond market. In the first quarter of 2022, around $4 billion more is expected to be contributed to the IMF by Argentina.

The IMF said earlier this month that it and Argentina were “fully committed” to reaching an agreement.

Reappointment talks are politically sensitive. Many voters around the country blame the fund for an economic collapse in 2002 that plunged millions of middle-class Argentines into poverty.

After being defeated in a recent congressional midterm election, President Alberto Fernandez’s administration faces political headwinds as the average Argentine struggles with wages that cannot keep up with the rapidly rising consumer prices. Read more

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Reporting by Hugh Bronstein; Editing by Ana Nicolaci da Costa

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