Argentina achieves an extension of its agreement with the Paris Club and postpones payments

Argentina won an extension of its agreement with the Paris Club on Tuesday that will allow it to postpone an imminent payment of about $2 billion, shortly before the International Monetary Fund votes on a new credit program for this country.

“Prior to the vote of the Executive Board of the International Monetary Fund, Economy Minister Martín Guzmán held a meeting with Paris Club President Emmanuel Moulin, in which the parties agreed to a further extension of the understanding reached in June 2021,” an official statement said Tuesday.

Argentina had last year agreed with the Paris Club to postpone the payment of some $2 billion outstanding until March 31, 2022, while negotiating the rescheduling of its debt with that multilateral body.

This payment corresponds to the last tranche of a debt that Argentina had already renegotiated in 2014.

“The agreement includes financial guarantees from the Paris Club in support of the Extended Facilities program that lasts thirty months, allowing Argentina to secure the financial sources identified in the agreement with the IMF,” said the Ministry of Economy.

The Argentine parliament has just approved an extended facility program with the IMF to restructure its $45 billion debt, which the board of that body should evaluate this Friday in Washington.

“During the duration of the program Argentina will make partial payments to Club (Paris) members in proportion to those made to other bilateral creditors,” the statement added.

Once the agreement is ratified by the IMF board, Argentina will receive a first disbursement of about $9.8 billion, which will allow a maturity of about $2.9 billion to be repaid by March 31 and strengthen international reserves.

Although Argentina's gross reserves stand at around $37 billion, liquid reserves are at such critical levels that they do not allow outstanding payments to the Paris Club and the IMF, according to the Central Bank.

nn/yow