the Government and the IMF postpone payments pending the Board meeting

the Government and the IMF postpone payments pending the Board meeting

The Government and the International Monetary Fund (IMF) They agreed to postpone the payments that were operating this week for US$2,717 million until March 31, the date on which the organization’s Board of Directors is expected to meet to approve the fourth revision of the agreement and the disbursement of US$5,300 million.

Argentina was to pay US$917 million tomorrow and US$1,789 million on Wednesday, according to the schedule established in the current Extended Facilities agreement.

In principle, these maturities were going to be canceled with the transfer of currencies that enabled the audit to December 31, but since the negotiation was extended in time due to the renegotiation of goals, both parties agreed to the extension, according to sources from the agency. Ministry of Economy.

In this way, Argentina avoids diverting from its reserves an amount that would have practically meant emptying the coffers of the Central Bank.

This postponement was possible given that the technical staff of the organization already gave the go-ahead to the review corresponding to 2022 and consequently only remains the formalism that the Board of Directors voted to trigger the transfer of the corresponding SDRs.

The payment schedule for Argentina is very demanding in the coming weeks, since in April it will have to pay another US$2.6 billion to the agency. In this way, all the money that would enter the Central on Friday, March 31, will leave in less than a month.

US$1,296 million mature on April 7, US$648 million on April 14, and US$681 million on April 28. The staggering of maturities is the result of the renegotiation that was signed in March 2023.

The agreement maintains the payment dates of the standby signed by the former president, Mauricio Macri, in 2018 and matched it with new disbursements for similar amounts in an Extended Facilities agreement.

During 2022, this mechanism left Argentina with a balance in favor of US$5,000 million (new debt) that will be reversed in 2023 at US$4,000 million.

Hence one of the reasons why the IMF accepted the modification of the reserve accumulation goals, given that the country will also suffer a sharp drop in tax revenue due to the effects of the drought and the drop in economic activity.

The agreement with the IMF is severely questioned by the Kirchnerist sector of the ruling coalition, which is calling for a total renegotiation of the signed terms.

Besides, The Central Bank reported that US$285.4 million from a loan from the Andean Development Confederation (CAF) entered the reserves today.

Source: Ambito

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