Due to the increase in the interest rate, the surcharges for the high debt and the increase in debt itself, on February 1, Argentina must pay the International Monetary Fund 710 million dollars.
It is the highest figure since the Fund granted the loan to Argentina in 2018. And projections indicate that this year’s total interest account with the IMF could approximately US$3,000 million versus US$1,746 million that were paid in 2022. And much higher than $1,347 million in 2021.
In Special Drawing Rights, the currency in which the IMF carries out its transactions, the interest payment for 1 February is US$ 526 million SDR. Last Friday 1 SDR was equal to 1.35 USD.
In turn, in SDR, debt increased from US$ 29,260 million at the end of December 2021 to US$ 34,216 millionwith an increase of 16.4%.
Interest payments in 2022 are on the rise: $367 million in February and a similar figure in May, but rose to $452 million in August and $563 million in November. and now inside February would add US$710 million.
This increase in the interest account is explained why the principal of the debt has not been reduced but increased for new disbursements made by the Fund for the cancellation of subsequent maturities and interest payments.
These disbursements were higher than the deadlines and therefore, for example, the debt to the IMF which at the end of 2021 was US$ 40,952 million, a year later (December 2022) it amounted to US$ 45,707 million, a smaller increase than the increase in SDRs because the price of IMF dollar currency was reduced.
The other key factor has been the increase in the interest rate and the surcharges that are applied to the amount owed, which more than quadruple the total rate that the country has to pay on that debt. .
With the Feb. 1 payment, Argentina will have paid $6.49 billion in IMF interest. Of this total, US$1,381 million was paid out during the government of Mauricio Macri e US$5.109 million Currently, Argentina’s debt to the IMF is 1.073% of its share.
These supplements are what Argentina has been asking for for many months that they be repealed, a position which has the support of other countries and international economists, but so far the IMF has not accepted this statement, despite the fact that the objectives agreed with the international organization have been achieved.
Those who are calling for the elimination of taxes and surcharges argue that they are punishing the countries that are experiencing greater difficulties and need more time to recover and repay the loan. Furthermore, they disproportionately affect low-income countries and those in a crisis situation – exacerbated by the pandemic, the Russia-Ukraine war and the international crisis – because they are applied according to the quotas they have within the IMF, which are inferior.
It is also argued that the size of the loan compared to Argentina’s share – which exceeds 1000% – reveals that it was a “political” loan that was used to finance capital outflows.
NS
Source: Clarin
