Argentina to repay $ 1.9 billion IMF loan on Wednesday – source

BUENOS AIRES, Dec.21 (Reuters) – Argentina to make $ 1.9 billion payment to the International Monetary Fund (IMF) on Wednesday as it struggles to revamp a failed 2018 loan deal, a source close government with first-hand knowledge of the situation told Reuters on Tuesday evening.

Payment will be made with funds Argentina received from the IMF’s Special Drawing Rights (SDRs) program, aimed at helping members tackle the economic impact of the coronavirus pandemic. The same mechanism was used by the grain-exporting country to pay nearly $ 1.9 billion into the fund three months ago.

“Yes, the payment will be made. The December and September payments are twin. The institutional framework for the two payments is the same,” the source said.

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A government spokesperson could not be reached for comment on Tuesday evening.

As Argentina’s economy emerges from a recession that began in 2018, the year the previous administration signed a $ 57 billion stand-by loan agreement with the IMF, it continues to fight inflation. more than 50% per year.

Argentina is looking to refinance the roughly $ 45 billion it still owes under the 2018 pact.

The two sides have been stuck in talks for more than a year, but hopes have recently risen for a deal and agreement on a medium-term economic plan, key to restoring Argentina’s credibility in the bond market. . In the first quarter of 2022, an additional $ 4 billion is expected to flow to the IMF from Argentina.

The IMF said earlier this month that it and Argentina were “fully committed” to reaching a deal.

The renewal talks are politically sensitive. Many voters across the country blame the fund for the 2002 economic collapse that plunged millions of middle-class Argentines into poverty.

After being crushed in a recent midterm congressional election, President Alberto Fernandez’s administration faces political headwinds as average Argentines struggle with wages that cannot keep up with the rapid rise consumer prices. Read more

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Reporting by Hugh Bronstein; Editing by Ana Nicolaci da Costa

Our Standards: Thomson Reuters Trust Principles.

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