Argentina Takes on Foreign Debt: Repayment of Qatar Loan in 32 Days

Analysts and consultants agreed that the loan signed with Qatar reflects the delicate context for the Central Bank’s reserves.

“The end of a week marked by the comings and goings around the payment to the IMF. Specifically, Minister Massa publicly announced a few days ago that the capital due date would be covered with a bridge loan from CAF and that the rest would be financed by activating the second tranche of the swap with China,” wrote José Echagüe, economist and strategist at Consultatio. “At that time, the official data that pointed to a fall in the BCRA’s position in gold for an amount that coincided with what was needed to face the maturity of capital called a lot of attention, and perhaps the announcement that the maturity interest will be financed with SDRs from the Qatar Treasury as a new bridge loan until the disbursement of the Fund arrives”.

For his part, the deputy and economic referent of Patricia Bullrich, Luciano Laspina, regarding the loan from Qatar, said “This new loan is a novelty and has to do with an Argentine diplomacy that has improved a lot in that area, I believe after of the World Cup”, said Laspina in reference to the conquest of Lionel Scaloni’s team. And he continued: “Obviously he has had a good diplomacy there, although unfortunately these funds are not used to invest in a bridge or a work, or a school, they are used to continue covering the potholes of this exchange disaster.”

In any case, the economist criticized the decision of the Central Bank to put gold as a guarantee to pay the IMF, something that ultimately did not prosper because the CAF loan was obtained.

“These are desperate measures and show that the government is stretching the agony of this model that is coming to an end to unsuspected limits,” he closed.

For its part, the consulting firm Delphos explained the conditions of the operation with Qatar: – It constitutes an external debt under foreign law (English Law) with jurisdiction extension and will pay the DEG rate established by the IMF on a weekly basis (currently at 4.3% per year). ).

– The due date of the loan is September 6 of this year (32-day term).

– Argentina additionally signs an irrevocable order for the IMF to pay Qatar the loan when the next disbursement from the Agency is approved. This implies that the disbursement should occur before September 6 so that Qatar can collect on this financing. It is important to note that Argentina would no longer receive US$7.5 billion from the IMF in the second half of August, but rather a smaller amount (around US$6.7 billion).

According to Delphos, “for the government it is one more tool to defer the impact on the reserves of the expected payments with the IMF, for which Chinese financing no longer seems to be sufficient. This would have activated alternative sources (CAF, loan from Qatar) so as not to further deteriorate net reserves, which would already be around US$ -9.4 billion this week”.