In a diplomatic nod to Argentina, leaders at the G20 Summit in Rome are planning to task their finance chiefs to look at the surcharge policy at the International Monetary Fund.
A draft of the G20 communiqué mentions that “our finance ministers look forward to further discussion of surcharge policy at the IMF Board in the context of the precautionary balances interim review.”
President Alberto Fernández is set to meet later Saturday with IMF Managing Director Kristalina Georgieva. Argentina, the Fund’s largest debtor, has proposed that countries be exempted from paying the surcharges amid the financial and economic burden of the pandemic. Talks on a new IMF programme have stalled ahead of the Argentina’s midterm elections on November 14.
The IMF charges countries a rate of 200 basis points, or two percentage points, on outstanding loans above 187.5 percent of a country’s quota, growing to 300 basis points if a credit remains above that percentage after three years. Argentina’s debts far exceed its quota at the IMF.
Two Argentine officials confirmed the statement will likely be included in the final communiqué to be published Sunday. Economy Minister Martín Guzmán has pinned his negotiation strategy over a record US$46-billion debt load due to the IMF on getting the institution to lower the surcharges.
An attempt to obtain temporary relief for the country was already turned down earlier this year so while this G20 gesture is promising, it’s still far from clear whether the IMF board will ultimately agree to a waiver. Surcharges are an important part of the fund’s revenues.
by Patrick Gillespie & Samy Adghirni, Bloomberg
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