Argentina: On IMF-related interest

By Mariano Sanchez Moreno

"Argentina has asked for the IMF to assist it through an Extended Fund Facility (EFF) to pay the previous Stand By Agreement (SBA, signed in 2018). As stated by the Fund in EFF's factsheet the interest burden is the base rate (1.2%) plus a surcharge, which depends on how much is requested and for how long.

For large credits (above of 187.5% of each country's quota in the IMF), the surcharge is 2%. If after 51 months the residual loan is still above 187%, the surcharge rises to 3%. That said, the Argentina's EFF represents over 1000% of its quota: for a long time, our country will pay at least 3.2% per year.

Taking into account that, the outstanding capital payments of the SBA is meant to be paid with the upcoming EFF credits, both loans' interest must be paid as well. On Jun-26, 51 months after the first EFF disbursements, the rate rises to 4.2%. Meaning? On USD 44bn, for over 12 years, Argentina will have to face interest rates between 3.2% and 4.2%."

Related dataset Fiscal - Argentina - Public Debt Profile USD