An IMF spokesperson revealed on Friday that it is in the middle of talks with the government of Argentina on a new loan aid. The country’s economy has been hard-hit by the pandemic as exports and economic activity in general plateaued last year.
It led the South American nation to incur a $45 billion debt on the Extended Fund Facility Program. The International Monetary Fund originally initiated this program.
According to the official, the talks have been going productively over the past few days. He did not give further details on the talks’ milestones so far. Nevertheless, he made it known to the public that the focus of the new scheme would be Argentina’s promotion of economic recovery and stability.
The driving force behind this will be the policies that will support increasing the employment rate. Moreover, they will support the development of domestic capital markets. Through this, they intend to ramp up local revenue through income creation.
Spectators have questioned the nation’s position as a vulnerable country and its eligibility to receive an additional set of funds.
For the record, the new round of funding will probably come from the financial institution’s Special Drawing Rights scheme. This institution deals with the world’s most fragile economies, especially during times of crises and economic setbacks.
The pandemic pushed many of the world’s developing nations further down the poverty line as the economic costs of containing the virus weighed.
Moreover, IMF holds $650 billion worth of reserve allocation that is up for distribution among its member states by the end of next month.
In an estimate, Argentina accounts for 0.67% of the organization’s incumbent quota resources. This makes it eligible to receive $4.4 billion of the rights directly.
Another Member State Needs Aid: Congo Case
It is not only South American nations that are in the depth of debt burden at the moment.
As of late, the International Monetary Fund has given its go signal on the $1.52 billion credit facility program.
The recipient will be the Democratic Republic of Congo, which also battles economic fragility along with the pandemic risk.
Analysts noted that the new funding would offer timely relief and would stage a faster shift away from the Covid-19 slump. On the other hand, the debt burden is not removed from the picture, as the fund needs to be returned at some time in the future.
The loan approval will give way for the distribution of $216.9 million to the government to refill its international reserves.