Thursday, June 13, 2024

ECONOMY | 07-09-2022 11:31

Argentina gets vote of support as IDB boosts loan on Massa trip

Economy Minister Sergio Massa wins a major loan commitment from Inter-American Development Bank, a symbolic victory in his bid to restore some confidence.

Argentina's Economy Minister Sergio Massa has won a major loan commitment from a key lender on his first trip abroad, a symbolic victory in his bid to restore some confidence for a government hit by inflation and political turbulence.

The Inter-American Development Bank (IDB) on Tuesday proposed a US$1.2-billion loan to Argentina for the last quarter of the year, larger than the original US$800 million spread over two loans. If the bank's board approves all the expanded loans, IDB lending to Argentina this year would total US$2.4 billion, according to an IDB statement.

Massa, Argentina's third economy minister since early July, is in Washington trying to assure US officials and multilateral institutions that President Alberto Fernández's government will fully implement its US$44-billion programme with the International Monetary Fund.

Massa, 50, is a career politician who has been dubbed a "super minister" by local press for consolidating several ministries into one and giving his position more political weight.

For the IDB, increasing lending to Argentina is a sharp change from the position of its leader a month ago. IDB President Mauricio Claver-Carone, a former Trump administration official, wrote a letter to The Wall Street Journal before Massa took office in July, hinting that the IDB would withhold new disbursements as political uncertainty rocked the economy that month.

“Argentina’s tumultuous financial record uniquely affects the bank’s costs,” Claver-Carone wrote on July 26. “As much as the IDB wants to approve new funds for Argentina, it cannot rubber-stamp requests to do so without prudently ensuring it has a development impact.” 

On Tuesday, Claver-Carone sided with Massa in front of reporters and praised the minister's "coherent and clear policies and clear objectives."

Massa will meet with IMF managing director Kristalina Georgieva on September 12 in Washington.

by Patrick Gillespie & Eric Martin, Bloomberg


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