Argentina mulls requesting IMF loan from resilience trust -source

People walk outside the National Congress, as the senate debates the government’s agreement with the International Monetary Fund (IMF) in Buenos Aires, Argentina March 17, 2022. REUTERS/Agustin Marcarian/File photo

LONDON – Argentina is considering asking for an International Monetary Fund loan under its new Resilience and Sustainability Trust (RST), designed to help countries ensure sustainable growth, a source with direct knowledge told Reuters on Wednesday.

The government could formally request funding from the RST as early as October, the source said on condition of anonymity, declining to give details of how much South America’s second-largest economy was planning to ask for.

Under the trust‘s rules, Argentina‘s request would be capped at $1.3 billion.

The IMF had no comment.

Economy Minister Sergio Massa, appointed in July, and his team are expected to travel to Washington in early September for his first meeting with the Fund.

The country is also due another review of its $44- billion Extended Fund Facility during September, which will consider the country’s adherence to the loan‘s criteria through end-June.

The IMF executive board approved the launch of the facility in April with lending expected to start in October.

Low-income and vulnerable middle-income countries can apply to get the financing, which will channel special drawing rights from countries with strong external positions, according to the Fund’s website. This funding aims to address long-term challenges such as climate change, and aims to offer maturities up to 20 years with a 10-year grace period.

Bangladesh formally asked the IMF for a loan from the RST in late July.

Funding pledges for the new RST have reached about $37 billion. The Fund hopes to reach its initial goal of $45 billion soon.