IMF: interest already paid for over $ 5,000 million

With the transfer of $ 444 million from the beginning of the week for the extraordinary loan granted in 2018, Argentina has already paid US $ 5,211 million in IMF interest.

Of that total, $ 1.381 million was paid during Mauricio Macri’s rule and $ 3.829 million by the current government, according to data from consulting firm ACM.

The $ 444 million was paid with the special drawing rights (SDRs) that the IMF granted to Argentina and which increased the national Treasury’s debt to the international financial organization.

The bill continues at a rate of approximately $ 1,300 million per yearwhich will be extended by approximately this amount due to the renewal of the deadlines from now to 2025 and will expire between 2026 and 2032.

Of the US $ 5,211 million paid, approximately US $ 1,632 million corresponds to the general interest rate that the IMF charges for these loans. And another $ 3,579 million was paid for expenses and premium that the Fund applies at the time of the loan It exceeds a certain amount in relation to the country’s share in the international organization and other charges.

Therefore, $ 2 out of $ 3 in 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, Argentina’s debt is equivalent to over 900% of the share.

These supplements are what Argentina has called for repeal, a position that has the backing of other countries and international economists, but so far the IMF has not accepted that claim.

Those asking for charges and surcharges to be eliminated argue that it punishes countries that are experiencing greater difficulties and need more time to recover and repay the loan. Furthermore, they disproportionately affect low-income countries in crisis situations – aggravated by 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 1,000% – reveals that it was a “political” loan that helped finance the capital outflow.

YN