CAF approves US$960 million loan for Argentina to pay the IMF

The Board of Directors of the Development Bank of Latin America and the Caribbean-CAF on Friday unanimously approved a short-term bridge loan of US$960 million for Argentina, with the aim of covering the payment of debt service with the International Monetary Fund (IMF). The operation will serve as a bridge financing so that Argentina can continue with the implementation of the Extended Facilities Agreement agreed with the IMF for the benefit of its fiscal, monetary and exchange rate policies, as well as in favor of the diversification and execution of the public debt strategy,” said an official statement from the CAF. In the same vein, the IMF supported the decision: “IMF staff supports CAF’s short-term support to Argentina’s balance of payments, anchored in the efforts of the new authorities to restore economic stability,” it said. Argentina must pay the Fund a debt maturity of US$919 million on December 21, according to the current schedule in the agreement. In this context, bridge financing to pay the global multilateral organization had been one of the priority negotiations of the new economic team. The loan was negotiated days ago by the Minister of Economy, Luis Caputo, and the authorities of the regional organization, its president, Sergio Díaz Granados, and his deputy, Christian Asinelli. Looking ahead to 2024, between January 9 and February 1 there are maturities of more than US$2.8 billion, and then the schedule is released until April 9. The idea of the new government is to renegotiate the existing agreement with the Fund. Last Wednesday, Caputo indicated that they are “reformulating the agreement that was broken” and specified: “We are on very good terms with the organization.” CAF is a leading institution in Latin America and the Caribbean with annual approvals exceeding USD 14,000 million for projects that promote the well-being of our population. The bank currently has 21 shareholder countries and, since its founding in 1968, has served Latin Americans and the Caribbean as one of the main sources of financing for development.

Original source in Spanish