Argentina pays US$1.9 billion installment to IMF amid political crisis

RIO DE JANEIRO, BRAZIL – For the first payment, Alberto Fernández’s government officially redeemed the US$4.33 billion in Special Drawing Rights (SDRs) issued by the IMF to inject liquidity into the global economy during the Covid-19 pandemic.

Some of this money was used to pay off the debt installment, currently being renegotiated. In 2018, still under the government of former President Mauricio Macri, Argentina closed a US$57 billion bailout program with the IMF. Of that amount, Argentina received US$45 billion.

Fernández’s goal is to complete the debt renegotiation with the IMF after the November legislative elections. Before the end of the year, Argentina will need to pay a new US$1.8 billion installment to the IMF.

The payment was made amid the political crisis sparked by the government’s defeat in the primaries for November’s legislative elections. The setback exposed a rift between Fernández and Vice President Cristina Kirchner, who leads a more leftist wing within the government.

Under pressure from Cristina and her allies, Fernández undertook a minor cabinet reform to change some of the names singled out by Kirchnerism as being to blame for the defeat in the primaries.

The heads of the Ministry of Economy, Martín Guzmán, and the Ministry of Production, Matías Kulfas, the main targets of the vice-president’s group, however, still remain in their positions.