The IMF gave the first go-ahead to transfer some US $ 4.3 billion to Argentina

Share your love

Some US $ 4.3 billion could reach Argentina soon from the International Monetary Fund (IMF). Today an important first step was taken: the executive board of the multilateral organization approved the issuance of US $ 650,000 million in Special Drawing Rights (SDR), an allocation that is distributed among the member countries according to the quota that each one has.

“The IMF executive board today discussed the proposal for a new SDR allocation of $ 650 billion, the largest issue in the history of the IMF aimed at helping its members, especially the most vulnerable, to overcome the Covid-19 crisis, ″ said the agency’s spokesman, Gerry Rice. On the other hand, he pointed out that there is still another instance, which will be in charge of the Board of Governors. The decision will require the consent of the member countries that represent a majority of 85% of the total votes.

Rice noted that the process could be finished in august, which is the date on which the funds are expected to arrive in the country.

Last March, IMF Managing Director Kristalina Georgieva, announced on its Twitter account that, through special drawing rights, the multilateral credit organization would distribute US $ 650,000 million to the different member countries. At that time, the local Ministry of Economy explained that Argentina has a “quota” or participation of 0.67%, for which it will receive SDR 3,052.6 million.

The SDR is an international reserve asset created in 1969 by the IMF to supplement the official reserves of member countries. It is based on a basket of five major currencies: the dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound. At a current conversion ratio of 0.7 (1 dollar is equivalent to 0.7 SDR), the total amount that Argentina will receive would be US $ 4,354 million.

Read Also   Maradona's historic goal ball against England would be auctioned for at least 2.8 million dollars

The new SDR allocation is an important step because will allow countries to better face the effects of Covid-19 and drive the global recovery from the pandemic. “Argentina fully supports a new general allocation of special drawing rights, which will provide funds for urgently needed low- and middle-income economies. The time when they are most needed is now, so we must act quickly ”, said the Minister of Economy, Martín Guzmán, in the last meeting of the finance ministers and presidents of the Central Banks of the G20 on February 26.

The debate over the destination of the funds

The funds are not even fully approved by the IMF, but In Argentina there have already been discussions regarding what expenses these billions of dollars will be allocated to.

The positions regarding the use of these funds divide waters in the Government. Originally, it was thought of using those dollars to cancel the maturities of this year with the IMF itself, which account for practically the same amount as SDR that will arrive in the country. However, a group of Kirchner senators, led by Oscar Parrilli, presented a project for the funds to be used to finance measures aimed at mitigating the economic consequences of the pandemic.

In his report to Congress, the Chief of Staff, Santiago Cafiero, Manifested more prone to that last position and stated that at least part of the money will be used for combat the consequences of the coronavirus.

“What I can guarantee is that whatever is determined will be to sustain and promote activity and employment, that is the determination of the President and of our political space,” he said, although he stressed that the final decision will be up to Alberto Fernandez.

Read Also   Justin Trudeau: The Pope should apologize on Canadian soil for the role of the Catholic Church in indigenous schools

Article Source

Share your love