Argentina won't use 'one dollar' of reserves to repay IMF, says economy minister
Argentina inflation
Argentinawould not use “a single dollar” of its own reserves to repay the International Monetary Fund (IMF), aReuters report quotedeconomy minister Sergio Massaas saying on Monday.
As per reports, the South American nation has to repay $2.7 billion to the IMF this week.
In a speech, Massa, who is also running for presidency this October, claimed that the prolonged swap agreement with China and the new loan from the Development Bank of Latin America (CAF) will make it possible.
Reuters quoted Massa as saying, “I want to bring you peace of mind - Argentina is not going to use a single dollar of its reserves to pay today's maturity."
Massa stated that the payback will be completed with a $1.7 billion second tranche of a swap with China and a $1 billion bridge loan from CAF, a step recently taken by Buenos Aires to complete a portion of its June payment to the IMF.
The move is being seen as an attempt to 'de-dollarise'. Already, countries such as Brazil, Argentina, Bangladesh, and India are using Chinese Yuan and bitcoin for international trade and payments.
According to reports from February this year, Brazil and Argentina were in talks to launch a joint currency, called the “sur”. Officials from Argentina and Brazil stated that the true goal of the initiative is to create a new unit of account (a synthetic currency similar to the International Monetary Fund’s Special Drawing Rights) for denominating bilateral trade and financial flows as an alternative to the US dollar.
Despite the near-universal rejection of the idea, the goal at its core—a reduced reliance on the US dollar—is worth considering, as per experts.A push for broader economic union in South America may spur much-needed economic growth, a Centre for International & Strategic Studies report said.
Argentina, which has been struggling with severe economic crisis with sky-high inflation and declining central bank reserves, has been trying to prevent a debt default with the IMF.
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