IMF Rejected Argentina’s Request for Temporary Surcharges Relief

The International Monetary Fund’s board of directors turned down a request by Argentina to discuss relief on the commissions the country pays for its record loan, a setback for the government of President Alberto Fernandez, Bloomberg News reported. In an informal meeting held last month, the board rejected a proposal to discuss temporary relief on so-called surcharges, which are the commissions charged to countries that use the lender’s credit lines extensively. Argentina, the IMF’s largest debtor, has proposed that countries be exempted from paying the surcharges amid the financial and economic burden of the pandemic. But the other member countries of the Washington-based organization didn’t see reasons to explore the idea, which is now unlikely to be discussed again any time soon. Without access to international debt markets and unable to pay back the Fund a loan worth more than $40 billion, Argentine officials have since last year campaigned against the surcharges as a way of reducing financial costs. The lender charges a rate of 200 basis points, or 2 percentage points, on outstanding loans above 187.5% of a country’s quota, growing to 300 basis points if a credit remains above that percentage after three years. Read more.