President Alberto Fernandez highlighted this Monday the commitment of the managing director of the IMF, Kristalina Georgievto “insist” before the board of the multilateral organization to deal with the initiative that promotes the elimination of the collection of surcharges.
Argentina has been demanding that the IMF review its surcharge policywhich consists of charging an additional interest rate to the one charged on loans that exceed each country’s quota and that imply extra interest costs of about US$ 1,000 million a year, according to calculations by the Ministry of Economy.
During a conference with the Argentine press that covers his participation in the G7 meeting in Germany, the head of state said he had “good EXPECTATIVES” around the subject after having spoken with Georgieva.
?️ “In a brief chat with @KGeorgieva He told me that he was going to insist on the issue so that the IMF board discusses the extension of the SDRs and the reduction of surcharges.” The president @alferdez at a press conference after the meeting of Heads of State and Government of the #G7. pic.twitter.com/48On5xR13n
– Alberto Fernández Press (@alferdezprensa) June 27, 2022
“In a short talk, She told me that she was going to insist on the issue so that the Fund’s board of directors would deal with it.and. War was added to the pandemic. The situation is much more serious. Besides, I wasn’t the only one who spoke about the indebted countries,” the President pointed out.
On the other hand, Fernández clarified that Georgieva openly proposes a reconsideration of the Special Drawing Rights (SDRs), that “we had to see how to take better advantage of them.”
“It’s a fight that we have to keep fighting. We are on a good path. They don’t change from one day to the next.added the head of state.
The structure of surcharges consists of an additional charge of 200 basis points on the outstanding debt balance when it exceeds 187.5% of the quota and 300 basis points if the commitments remain above 187.5% of fee after 36 months.
As Argentina agreed to a c$45 billion revenue -equivalent to 1,000% of the country’s quota in the organization, which amounts to almost US$ 4,500 million- and the IMF’s standard interest rate for its loans to middle and high income countries is currently 1.17%, the interest rate paid by the country is 4.17%.
At the last G20 meeting in Rome, in October last year, world leaders included in their final communiqué a support for the claim of Argentina and other countries.
“Our finance ministers look forward to continuing to discuss the policy of surcharges in the IMF Board in the context of the mid-term review of precautionary balances”, expressed in that sense the leaders who signed the Final Communiqué.
