Argentina’s government made a US$334-million interest payment to the International Monetary Fund (IMF) on Monday, the Economy Ministry has confirmed.
This is the third made by Argentina this year, following payments in February and May that totalled around US$600 million. Another US$400 million in interest is due in November.
Argentina is currently in talks with the IMF to restructure its record US$57-billion credit-line granted in 2018 into a new financing programme. The country has received around US$44 billion to date and President Alberto Fernández has refused the remaining tranches.
In theory, the government will begin to pay down capital this year, with maturities of US$1.9 billion due in September and again in December. The Fernández administration may chose to pay down that debt with the US$4.3 billion it is due to receive from the Fund later this year, via special drawing rights (SDRs).
The government and the IMF are expected to eventually agree an Extended Fund Facility (EFF) programme, though it is unknown if this will happen before Argentina’s midterm elections in November. An EFF scheme is designed to assist countries that are facing severe balance of payment issues in the medium term due to structural deficiencies. Unlike a stand-by agreement, like the deal agreed in 2018 by the Mauricio Macri administration, such programmes normally last some 10 years.
Argentina, which is currently in its third year of recession and is excluded from capital markets, recently reached an agreement with the Paris Club to delay repayments on a US$2.4-billion loan until March 2022.