The International Monetary Fund (IMF) categorically rejected a request from Argentina to reduce commissions that the country pays. The decision is a hard backhand for the president Alberto Fernandez, who requested that reduction to advance with an agreement with the financial institution. However, the Government still hopes with a new treatment of the issue in the short term.
As reported by the international agency Bloomberg, the board of the IMF rejected the proposal to discuss a temporary relief on the so-called surcharges, which are the commissions charged to the countries that use the credit lines of the IMF above the quota that corresponds to them as members of the organization.
Argentina, the largest debtor of the IMF, proposed that countries be exempted from paying surcharges for the pandemic. But the other member countries of the organization did not support the idea.
Argentina agreed to a three-year stand-by program with the IMF which included access to financing for 56,000 million dollars, of which the country used about 45,000 million dollars. This year it has already paid a maturity of 1,900 million dollars for that aid package, a similar one will be paid in December and during 2022 payments for about 19,000 million dollars that the Government needs to postpone are concentrated.
The agency charges a rate of 200 basis points, or 2 percentage points, on outstanding loans that exceed 187.5% of a country’s quota, which increases to 300 basis points if a loan continues to exceed that percentage after three years.
The IMF defended in the past surcharges applied to lines of credit, and his spokesman Gerry Rice said earlier this year that they help strengthen the IMF’s balance sheet. The last review of this tool by the agency took place in 2016.
In addition to Argentina, other groups that have advocated modifying the current surcharge system are the G-24 countries, a group of developing countries that includes Mexico and India.