2023-12-18 03:21:30
The CAF Development Bank of Latin America approved a short-term loan for Argentina for 960 million dollars, money that the South American country will use to cancel a debt maturity with the International Monetary Fund (IMF), official sources reported.
“First great achievement. Sorting the accounts and making the corresponding adjustment allowed the Argentine Republic to access financing from the CAF and avoid default with the IMF,” indicated the Office of the Argentine president, Javier Milei, through the social network X.
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The granting of this loan was unanimously approved by the CAF board of directors in an extraordinary virtual meeting held this Friday. This is a short-term liquidity bridge loan for 960 million dollars that will help Argentina cover the payment of debt services that expire next week with the IMF, an organization to which the South American country owes about 46 billion dollars.
CAF indicated in a statement that the loan operation was carried out “in consultation and coordination with the IMF and other multilateral banks.” With meager monetary reserves in the Central Bank, Argentina has had to resort to external financing several times this year to be able to cover debt maturities with the IMF, an organization with which it signed a refinancing agreement in March 2022.
Javier Milei, president of Argentina
Last Wednesday, the Central Bank of Argentina indicated in a statement that, after Milei’s inauguration as Argentine president last Sunday, formal dialogue with international organizations had begun and “rapidly progressed,” including the IMF, with the central objective of “clearing the uncertainty surrounding the agreed disbursements with a view to meeting future capital maturities.”
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“This uncertainty responds to the obligation that Argentina faces to begin the formal process of requesting a waiver for non-compliance with the goals agreed upon (with the IMF) in August of this same year,” the statement said.
The Central Bank assured that Argentina “will make the necessary efforts to restore the validity of the agreement signed with the IMF and will carry out additional negotiations that it considers will contribute to improving current financing conditions.”
Buenos Aires, Argentina
The new Milei Government announced last Tuesday a severe adjustment plan with the aim of recovering fiscal balance in 2024, which includes spending cuts and tax increases, in addition to a 50% devaluation of the Argentine peso that took place on last Wednesday.
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This plan has received the support of the IMF, whose Director of Communications, Julie Kozack, said last Tuesday that these “strong initial actions” aimed “to significantly improve public finances.”
EFE
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