The IMF will evaluate the Argentine request to lower the interest on the debt, but Georgieva defended the rate

Paula Lugones

04/07/2021 1:32 PM

• Clarín.com

• Economy

Updated 04/07/2021 1:32 PM

The managing director of the International Monetary Fund, Kristalina Georgieva, said this Wednesday that

"it is the opportune moment"

to evaluate the Argentine proposal to reduce or eliminate the surcharge of rates applied to loans,

but defended the current scheme

and said that it will be discussed later. if there is consensus among member countries to promote any change.

In a press conference in the framework of the Spring Assembly of the Fund and the World Bank, which is held this year in virtual form due to the pandemic, Georgieva referred to the priorities of the global agenda of the organization and answered questions on specific topics , such as the revision of the surcharge of rates promoted by Argentina.

The Government seeks that the Fund modify its policy of surcharges in the interest rate for the debt,

something that would obviously benefit our country when it comes to paying the loan of 44,000 million dollars that was granted in 2018.

The issue had already been working with a low profile in some forums such as the G20, but Vice President Cristina Fernández highlighted the issue in a speech on March 24, when she said that the body should offer a longer payment term and lower interest rate. for a new program because current conditions are "unacceptable".

The Government considers it unfair that there is a surcharge for the countries that owe the most money, a policy established in the Fund that applies to all member countries.

Now, for example, Argentina pays a 3% rate for its debt, but aspires to lower it.

Guzmán is one of the promoters of this idea and this Wednesday he presented it at the meeting of G20 ministers, as he has done in previous meetings.

In addition, the initiative was formally presented on Monday at the G-24, the forum of developing countries, of which our country is also a part.

When asked about the issue, Georgieva said that

"Guzmán brings up the issue when the Fund is going to make its periodic review of rates and it is the moment when these types of issues can be discussed."

However, he explained that "

there is a reason why the Fund introduced these surcharges in the past for exceptional access cases and that is to create an incentive for countries to move in and out of the program as effectively and quickly as possible."

He added that “since the Fund is a lending institution for countries that rather face difficulties, this means a high risk and that requires the Fund to also build principles, for the members, not for the board of directors, to

build strength through preventive balances .

This is in the sense of prudent management of the Fund's resources.

But, as I said, there will be a review by the members and we will see what the consensus of the members is ”.

He was also asked whether it was possible for an agreement to extend beyond October (after the legislative elections) and he

avoided giving details.

He said there was a "constructive dialogue" between the two teams and that they will continue to work.

“The two teams agreed on a set of broad principles for the program and we will continue to work.

We will continue to advance and when there is an agreement we will take it to the board of directors ”.

Another initiative that Argentina could benefit from is the reallocation of Special Drawing Rights (SDR), which is

an injection of fresh funds

that would be distributed proportionally among the member countries according to their share in the organization.

If the recapitalization were US $ 650,000 million, the figure that is being considered today, Argentina would receive about 4,400 million, a sum that the Government eagerly awaits in an electoral year.

You could use that sum to meet maturities this year if the agreement with the Fund is postponed until after October.

Asked about the SDR allocation, Georgieva said that the Fund has started working on it.

He noted that there is

“strong support”

on the issue and that “we will engage with our members to ensure that the options we present have broad member support and are defined on the basis of contributing more effectively to the needs of the countries. vulnerable ”.