The IMF's extra money would arrive in August, but the agency warned that it cannot be used to restructure debt


The Deputy Director of the International Monetary Fund, Geoffrey Okamoto, said today that the next issue of "Special Spin Rights" (SED, the Fund's "account currency", resulting from a basket consisting of the dollar, yen, yuan, euro and pound sterling) is to "adapt the reserves" of the agency's partner countries, not to supplant specific credit programs in support of structural reforms." Nor are they, he added, "to avoid a necessary debt restructuring" that countries have with private creditors.

Okamoto is an American citizen and was appointed there by Washington, following the tácita rule that since 1944 assigns the highest executive position to Europe and the second to the United States.

Héctor Torres, a former Argentine representative on the Fund's board, noted in a tweet that Okamoto's words are a "IMF response to Argentina and Mexico's proposal."

At the virtual spring (boreal) meeting, the governments of Argentina and Mexico issued a joint statement, over which Minister Martín Guzmán and his Mexican pair, Arturo Herrera Gutiérrez, later abounded, calling for the redistribution of the issuance of about $650 billion in SDS, to be approved in June, so that central countries allocate or "lend" the share they do not use not only to assist lower-income countries , but also the middle-income ones.

On the Argentine side, however, they noted that Okamoto's words have nothing to do with the Argentine-Mexican proposal and that the Fund encourages the agency's partner countries to agree with each other on the "loan" of quotas from one country that does not use them to another that does. As an example of surplus states, they pointed to China, India and the G-7 countries.

From Guzman's surroundings they also said that Argentina will not pay the next maturity (in May, extendable until July) of USD 2.4 billion with the Paris Club making use of the new broadcast.

Timely for Paris

In fact, I couldn't either. The issuance of DEGs, which on Tuesday received approval at the IMF-World Bank Assembly, would be approved in June and accreditation to the central bank account (in proportion to the "quota" in the Fund of the respective country) would be from August, international and Argentine government sources agreed.

Instead, these resources would be in time for the government to face, on 15 September, the first maturity, equivalent to USD 1.910 million, of the credit that Argentina contracted with the agency in 2018, during the government of Mauricio Macri. The second installment, for the same amount, falls on 15 December and maturities are steeped in 2022 and 2023, when, according to the original schedule, Argentina must cancel the bulk of the credit, from which it received USD 45 billion.

Okamoto's words cast a cloak of doubt on that possibility, which would give Alberto Fernandez's government more time to agree on a refinancing program only after legislative elections.

Argentina's "quota" in the Fund is 0.67%, so an allocation of USD 650 billion is USD 4.355 million for the country.

Italian proposal

It should be remembered that the new issue was originally proposed by Italy, with support from its European Union partners, basically to assist the countries of North Africa, its main "customers", which they usually represent on the IMF board, which has 195 "partner" states, but only 24 members on its board.

Argentina and Mexico's proposal is to create with the new issue a common fund that is accessed not only by the poorest countries, but also by middle-income countries, to improve their liquidity and to end bilateral trade.

With regard to the comments of the director of the Department for the Western Hemisphere (i.e. the Americas) of the Fund, Argentina-born Mexican Alejandro Werner, that the government is divided into negotiations and times with the Fund, the sources of Economics downplayed them. Werner, they said, "he's not involved in the negotiations."

The talks are with the deputy director of the Department, the American Julie Kozack, and the "head of mission" of the Argentine case, the Venezuelan Luis Cubeddu. The boss of both is, precisely, Werner.

Next week Guzmán will start a round around Europe in search of wills for the Argentine-Mexican proposal, the decrease in interest that the Fund charges to its longer and bulkier loans and the extension of the maximum repayment period from 10 to 20 years. The minister himself acknowledged that these objectives require an intense international lobby and could hardly be achieved this year.

READ ON:

Inflation of 46% and growth of 6.5%: moderate optimism among economists consulted by the Central Bank

Guzman reiterated its request for Argentina to get more IMF resources


Related Businesses
    - - Customer

    Copyright © 2024 by CreditRiskMonitor.com (Ticker: CRMZ®). All rights reserved.  You are not permitted to use this report or the information contained herein for any purpose not expressly permitted by CreditRiskMonitor.com, Inc. Except as expressly permitted by CreditRiskMonitor.com, Inc., you are not permitted, in whole or in part, to copy, alter, correct, adapt, translate, enhance, lease, sell, sublicense, assign, distribute, publish, otherwise make available to any third party, or prepare derivative works or improvements of this report or any of the information contained therein. You are not permitted to reverse engineer, disassemble, decompile, decode, or adapt the software, algorithms or other processes used to prepare this report, or otherwise attempt to derive or gain access to the source code of same. You agree not to remove, alter, obscure, combine or otherwise change any disclaimers, trademarks, copyrights, other intellectual property rights, proprietary rights, or other symbols, notices, marks, or serial numbers on or relating to any copy of the report or on marketing or other materials that CreditRiskMonitor.com, Inc. may provide to you. You will not use this report in any manner or for any purpose that infringes, misappropriates, or otherwise violates any right of any party, or that violates any applicable law.  
    The FRISK® scores, agency ratings, credit limit recommendations and other scores, analysis and commentary are opinions of CreditRiskMonitor.com, Inc. and/or its suppliers, not statements of fact, and should be one of several factors in making credit decisions.  Any reliance you place on the information in this report is strictly at your own risk. Except as expressly provided by CreditRiskMonitor.com, Inc., no warranties or representations of any type, including without limitation of results to be obtained, merchantability or fitness for a particular purpose, are made concerning any part of CreditRiskMonitor.com, Inc.’s service, including without limitation the FRISK® scores.  The information published above has been obtained from sources CreditRiskMonitor considers to be reliable.  CreditRiskMonitor.com, Inc. and its third-party suppliers do not guarantee or validate the accuracy and completeness of the information provided in this report, the underlying information input to create the FRISK® scores, and specifically do not assume responsibility for not reporting any information omitted or withheld.  By using this website, you accept the Terms of Use Agreement
    Contact Us: 845.230.3000
    Fundamental financial data concerning public companies may be provided by Refinitiv (click for restrictions)
    Thursday, March 28, 2024