Argentina is asking a Caracas-based development bank for a $1 billion bridge loan to help it cover debt owed to the International Monetary Fund until its board approves the refinancing of a record $44 billion program, unlocking additional cash disbursements.
(Bloomberg) — Argentina is asking a Caracas-based development bank for a $1 billion bridge loan to help it cover debt owed to the International Monetary Fund until its board approves the refinancing of a record $44 billion program, unlocking additional cash disbursements.
Argentina’s Economy Minister Sergio Massa made the request Thursday to the Development Bank of Latin America, known as CAF, asking the institution to convene an extraordinary meeting on Friday to deliberate on the request.
In the letter, Massa writes that Argentina has already reached an agreement with IMF staff that will be announced “shortly,” without providing details.
A CAF spokesman didn’t immediately provide comment when contacted by Bloomberg News.
Argentina’s economy ministry declined to comment.
Investors are anxiously awaiting the confirmation of a staff-level agreement with the IMF, including details about upcoming loan disbursements and conditions to be imposed on Argentina.
The South American country needs to repay $2.6 billion to the Fund by July 31 as part of the current aid program, whose conditions it was unable to meet after a severe drought cost it about $20 billion in agricultural exports this year.
Read More: Argentina-IMF Deal Seen by Friday as $2.6 Billion Payment Looms
The CAF had about $30 billion in outstanding loans at the end of the first quarter of this year.
Argentina is already one of its largest borrowers, with $4.1 billion in loans.
A refinancing deal with the IMF is expected to give Argentina much-needed breathing room as it heads into a presidential election amid deepening economic and currency crises.
It will be up to a new president who takes office in December to negotiate the next steps of the program, including the tough reforms needed to put South America’s second largest economy back on its feet.
CAF’s board plans to hold a special virtual meeting to discuss and potentially approve Argentina’s request at 5 p.m.
ET on Friday, according to a separate invitation seen by Bloomberg News.
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