On November 20, the IMF’s Executive Board approved a request from Argentina to extend by one year the repayment of SDR 105.9 million (about $141 million) under the Supplemental Reserve Facility (SRF).
On January 12, 2001 (see Press Release No. 01/3 on the IMF’s website), the IMF approved financing for Argentina under the SRF as part of a Stand-By Arrangement to ease a short-term financing constraint. Normally, an SRF is expected to be repaid in two installments—one year and one and a half years after it is disbursed. For Argentina, the second installment would have come due on November 22, 2002. But the borrowing country may request an extension of up to one year if repayment would cause undue hardship and if it is working to strengthen its balance of payments. At the end of the extension, the country is obligated to repay the loan.
In commenting on the Executive Board decision, Acting Chair and Deputy Managing Director Shigemitsu Sugisaki said that, in light of Argentina’s difficult economic and social circumstances, Executive Directors agreed to the Argentine authorities’ request for an extension. “The shifting of the SRF disbursement to an obligations basis would signal again the IMF’s commitment to help Argentina,” he said.
However, Directors were concerned that it had not been possible so far to reach agreement on an economic program that the IMF could support. Although progress has been made in some areas toward formulating such a program, they noted that a number of important issues remained to be resolved. Directors expressed the hope that understandings on the open issues could soon be reached.
For the full text of IMF Press Release No. 02/51, see the IMF’s website (www.imf.org).