I wish I understood how this arrangement works with the IMF.
Next week Argentina needs to pay the IMF US$3.4bn and today it's just been announced that the IMF is going to make available US$7.5bn.
So Argentina is borrowing money from the IMF in order to pay money back to the IMF?
The deal officially combines the fifth and sixth reviews of a 30-month $44 billion loan program that was agreed to in 2022. The sixth review of the agreement, which Argentina is partly using to pay back existing debt with the IMF, had been scheduled for September.
According to The Financial Times, this had to be done in order to avoid a default, but one suspects that Massa needed to twist a few arms, bearing in mind the up coming elections.
Under the current program, the country is expected to get $4 billion in July, more than $3.3 billion in September and another $3.3 billion in December. These disbursements are set to mainly repay a failed 2018 bailout.
Does anyone know how this works? Borrowing money from Peter to pay back Peter?