The International Monetary Fund is “very keen” to support Argentina and the country could be a candidate to receive financing through its Resilience and Sustainability Trust (RST), the Fund’s chief, Kristalina Georgieva, said.
The RST offers long-term financing to countries undertaking reforms to reduce risks to prospective balance of payments stability. The amount is equivalent to either 150% of a country’s IMF quota or US$1 billion, whichever is smaller. The funds have a 20-year maturity and a 10 and a half-year grace period, during which no principal is repaid.
Georgieva’s comments came in the midst of an interview she had with Reuters due to the COP climate summit. IMF sources contacted by the Herald said they had nothing more to add to her remarks.
Georgieva had a first virtual meeting with Milei on Friday, which she described as a “very constructive engagement, very serious discussion.”
“Let’s see how the engagement goes — but good, promising first step,” Georgieva told Reuters in an interview late Monday.
“The most important way Argentina can help itself is by addressing the macroeconomic imbalances that have accumulated. But then again, we are very keen to support Argentina, address the deep problem of inflation, and create an environment for private sector-led growth that can perk up employment and the economy overall.”
Far-right libertarian Milei will also meet with a top security aide to U.S. President Joe Biden in Washington, the White House confirmed on Monday, after a lunch with former U.S. President Bill Clinton in New York.
Milei secured a stronger-than-expected election win and on December 10 is set to take the helm of South America’s second largest economy, which is engulfed in an severe crisis that has seen inflation soar above 140% and net reserves sink deep into the red.
Georgieva said she was interested in discussing how Argentina could become less vulnerable to climate events.
“They have very significant structural problems that the fund can support them to address, as well as very significant adaptation issues,” such as a drought.
Countries wanting to borrow from the Fund’s RST vehicle, launched in 2022 to help vulnerable middle-income and island countries, are expected to fulfil a number of preconditions — including having an IMF program of which there should be at least 18 months remaining as well as sustainable debt and adequate capacity to repay.
It was unclear how Argentina, possibly tapping into the RST, would be affected by its $44 billion IMF programme — the Fund’s largest –- having veered off track and running out in September 2024.
The IMF said in late September it had received total pledges amounting to 31.2 billion special drawing rights — an international reserve currency backed by dollars, euros, yen, sterling and yuan — from 18 members since the inception of the RST, which provides access to low-interest loans to about 140 nations.