MercoPress. South Atlantic News Agency

IDB grants Argentine US$ 700 mn loan

“This disbursement helps to strengthen Argentine reserves,” Massa said

Argentina is to receive US$ 700 million to increase the Central Bank's reserves after the IDB Board of Directors agreed Wednesday to a Special Development Financing (SDL) package in light of Superminister Sergio Massa's presence in Washington DC for the annual meeting of the International Monetary Fund (IMF) and the World Bank.

“This disbursement helps to strengthen Argentine reserves,” Massa said. the loan is a “part of the financial support package that Argentina has from different multilateral” agencies, he added.

The financing will have an amortization term of seven years, a grace period of three years, and an interest rate based on the SOFR (Secured Overnight Financing Rate, reference rate in dollars).

The loan was confirmed by the IDB in a statement in which it specified that it will be used to cover short-term financing needs, as well as to protect social spending for vulnerable groups and infrastructure, “while reforms are implemented to reduce the public deficit, promote price stability and ensure debt sustainability.”

During his speech at the 56th IDB Meeting of the Network of Chief Economists of Central Banks and Finance Ministries of Latin America and the Caribbean, Massa pointed out that “knowledge economy, energy, minerals, and proteins are four of the major sectors with which Argentina has the opportunity to recover from what the processes of external asset formation represented, which one day we have to discuss them in regional terms so that citizens who evade [taxes] in our countries do not find their fiscal lair in the United States.”

”What is the balance of the relationship with the rest of the multilateral (organizations)? It is absurd that when the IDB as an institution for development allows us to access infrastructure investments and our countries invest resources from their Treasury as a counterpart, at the time of analyzing the fiscal goals in other multilateral organizations, the investment is computed as a deficit because that condemns us to be poor,” he added Massa.