BUENOS AIRES: Argentina’s holdings at the International Monetary Fund (IMF) jumped last month by the same amount that the US government’s assets declined, as data from the lender is likely to indicate a new form of US financial aid to Javier Milei’s government.
In October, Argentina’s special drawing rights (SDRs), the IMF’s reserve asset, increased by 640.8 million SDRs (US$870mil), while US holdings fell by the same amount compared to September, according to data published on the IMF’s website.
On Nov 1, Argentina also made interest payments to the IMF totalling about 621 million SDRs, which stems from the nation’s own debts with the lender in Washington.
The SDRs are assets created by the IMF that are distributed to countries in proportion to their quota. Countries at the IMF can channel their SDR holdings to other nations if asked.
To be sure, the IMF data doesn’t confirm Argentina’s SDR holdings increased because it drew down on the swap line with the United States, and it’s unclear if it’s used the swap for other purposes so far.
However, Treasury Secretary Scott Bessent acknowledged on MSNBC on Tuesday that Milei’s government had tapped a “small amount” of the swap line that the two nations signed last month.
The Treasury Department has not released any public details about the terms of the agreement and has not responded to repeated requests for comment on the aid programme since Argentina’s central bank announced it on Oct 20.
Bessent provided Milei, a top US ally in Latin America, with a sweeping rescue package as the libertarian leader faced a market sell-off before his party won midterm elections in late October and turned around investors’ sentiment.
Beyond the US$20bil swap, Treasury also bought Argentine pesos and started talks with Wall Street banks to line up more financing for Argentina. — Bloomberg
