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April 7 (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva on Wednesday said concerns raised by Argentina over the fund’s imposition of surcharges on some debtors are a matter that would be discussed by IMF members.
Georgieva said the IMF uses interest rates or surcharges as part of its risk management practices.
The IMF chief said the Fund was undergoing a periodic review of its charges, providing an opportunity to discuss a request by Argentine Finance Minister Martin Guzman for lower rates, with any changes to be based on a consensus among members.
She said the IMF had implemented surcharges on lending programs to create “an incentive for countries to move in and out of programs as swiftly as possible.”
“Given that the Fund is an institution lending to countries, more often than not, when they’re faced with difficulties, that poses a high risk, and therefore it requires for the Fund to also build … strength through precautionary balances,” she said.
She said the IMF was continuing constructive discussions with Guzman and the Argentine authorities.
President Alberto Fernandez’s center-left government is scrambling to renegotiate the roughly $45 billion the country owes to the IMF. The coronavirus crisis has ravaged the top grains producer’s already ailing economy, complicating efforts to make good on its obligations.
Argentina also faces the maturity of $2.4 billion in debt it owes to the Paris Club group of creditor nations, a payment it hopes to reschedule as reserves have plunged along with output.
Argentina’s talks with the IMF have stalled due to political pushback from some factions of Argentina’s government and high global prices for export soy, which has given the country room to delay a deal. Economists now expect a deal will not be reached until after midterm elections in October. (Reporting By Andrea Shalal; editing by Jonathan Oatis)
