This November 1, the equivalent of US $ 529.6 million for interest payments for the extraordinary loan granted by the IMF in 2018, increased by the new disbursements agreed with the former minister Martín Guzmán.

With this payment, Argentina has already paid the International Monetary Fund interest of US $ 5,750 million.

Of that total, $ 1.381 million was paid during Mauricio Macri’s rule and $ 4.369 million by the current government, according to data from consulting firm ACM.

The $ 529.6 million was paid with the Special Drawing Rights (SDRs) that the IMF granted to Argentina and this increased the National Treasury’s debt to the international financial organization.

Due to the loan extension agreed in the new agreement with the IMF, the interest bill hovering around USD 1,300 million per year (2019/2020/2021), adds this year just over $ 1.7 billion. And they continue in those values ​​if, as agreed, the deadlines are renewed between now and 2025 and expire between 2026 and 2032.

Of the US $ 5,750 million paid, approximately US $ 1,772 million corresponds to the general interest rate that the IMF charges for these loans. And an additional $ 3,978 million was paid for charges and surcharges that the Fund applies when the loan exceeds a certain amount in relation to the country’s share in the international organization, and other charges.

Therefore, $ 2 out of $ 3 of interest corresponds to expenses and surcharges.

Advisory firm ACM explained that an IMF loan accrues a base rate of 1.05%. Then a “surcharge” is charged which depends on the amount and the term of repayment of the credit. This is 200 basis points (2%) on the residual credit amount that exceeds 187.5% of the debtor country’s share in the Fund. And if the credit remains above 187.5% of the quota after three years, this increase rises to 300 basis points (3%).

Currently, the Argentine debt equates to more than 950% of the fare.

These supplements are what Argentina is calls for them to be repealed, position that has the support of other countries and international economists, but so far the IMF has not accepted this claim.

Those calling for the elimination of charges and surcharges argue that these additions punish countries that are experiencing greater difficulties and need more time to recover and repay the loan. In addition, they disproportionately affect low-income countries in a crisis situation – worsened in the harsh months of the pandemic – because they are applied on the basis of their lower quotas in the IMF.

It is also argued that the size of the loan in relation to Argentina’s share – it exceeded 1000% – reveals that it was a “political” loan to the previous government that helped finance the capital outflow and that the current government recognized with payments and new disbursements.