The IMF would remove the surcharges

Page I12 in the United States

From Washington

The decision of the economy ministers and presidents of central banks of the G20 to ask the International Monetary Fund to debate the elimination of interest surcharges on their loans had a quick response from the body. In a statement published this Thursday, the International and Financial Committee that advises the IMF board of directors supported that request, as the Argentine government intends. The same committee also reported that it will analyze the creation of a trust fund that allows the reallocation of Special Drawing Rights (SDR) – the currency of the IMF – from the great powers to the countries that need it most.

Both news generated enthusiasm in the Argentine delegation headed by Minister Martín Guzmán in Washington. It is not surprising: surcharges constitute one of the central points of Argentina’s position in the renegotiation of the debt that Mauricio Macri took. For the Palacio de Hacienda, this is a sign of “incremental support” and that “more and more countries” are asking the agency for a review of its policy.

For Argentina, a change in surcharge policy is key. For this reason, sources from the Ministry of Economy said that “it is clearly very positive that the G20” has included a call to the members of the IMF to review it. As this happened for now at a meeting of finance and central bank officials, the next step they hope is that it will also be included in the G20 presidents’ meeting in Rome later this month. If that happens, they expect the issue to be discussed at a meeting of the IMF board, as mentioned in the G20 ministers’ communiqué.

In Economy they calculate that the surcharges represent an extra charge of 900 million dollars annually. In Washington, a delegation headed by the minister sought to add support for this proposal through a series of bilateral meetings with leaders who participate in the annual meetings of the IMF and the World Bank.

In the US capital, Guzmán met with delegations from Italy, Switzerland, Germany, South Korea and Mexico, each with a different importance for the Argentine economy. Switzerland, for investments in the country. Italy, for its current presidency of the G20. South Korea, for the possibility of finding a common vision in international spheres. From the portfolio, they especially highlighted the meeting with the current German Finance Minister, Olaf Scholz, who has been the most voted candidate in the recent elections of the European country.

The Ministry of Economy also highlighted another issue included in the G20 document and referred to the request that the forum made to the IMF to create a new line of financing. It is a resilience and sustainability fund that helps mitigate risks against the stability of the balance of payments, especially those that may come in the context of future pandemics and climate change. In this sense, the Ministry highlights the inclusion in the proposal of the category of “vulnerable middle-income” countries as eventual recipients of the new fund, a definition that could benefit Argentina.

During the visit to the US capital, the delegation also met with David Lipton, former IMF number two and current adviser to Janet Yellen in the Treasury Department. The meeting sought to “build fundamental understandings,” Ministry sources said. Treasury support is essential for the United States to accompany any renegotiation with the IMF. The portfolio headed by Guzmán avoids putting a date on the eventual agreement, in line with what President Alberto Fernández communicated this week on Twitter.

In the United States, the delegation will continue its agenda on Friday in New York, when the chief of staff, Juan Manzur, joins the delegation. In Manhattan, they are expected to meet with investors and discuss the country’s political and economic landscape.

Disclaimer: If you need to update/edit/remove this news or article then please contact our support team Learn more

Leave a Reply