The Argentine government announced Friday that it will use a $775 million loan from Qatar to make a payment to the International Monetary Fund as it awaits clearance of a $7.5 billion transfer from the IMF.
According to an economy ministry source, the credit operation would allow Qatar to lend Argentina $775 million in Special Drawing Rights (SDRs, or money that countries reserve in the IMF).
“It is the first time in history that Qatar has carried out a credit operation with Argentina,” said the source, on condition of anonymity, adding that this will allow the South American country to pay the maturity “without using reserves.”
The credit was negotiated by Argentine Economy Minister Sergio Massa with the Qatari economic team “in absolute secrecy.”
Argentina is attempting to avert a new drain on its depleted international reserves.
The Qatari loan will be used to the IMF’s interest payment due on Friday.
It will subsequently be paid with the disbursement that Argentina expects to receive from the multilateral organization after its executive board approves the fifth and sixth adjustments to the agreement with the country in mid-August.
Argentina entered into a $57 billion loan agreement with the IMF during the administration of Mauricio Macri.
After entering office at the end of 2019, President Alberto Fernandez renounced the outstanding payout tranches and renegotiated it as a $44 billion dollar agreement in 2021.
Argentina paid the IMF $2.7 billion in yuan through a currency swap with China and a $1 billion bridge loan from the Andean Development Corporation (CAF) on Monday.
Argentina’s international reserves include, in addition to dollars, gold and other instruments such as the yuan from the Chinese currency swap.
In Argentina, an exchange control system has been in force since 2019 and several exchange rates work in parallel to the official one.
Historically, Argentines bet on the dollar to prevent the depreciation of the Argentine peso.
