Qatar is no stranger to giving loans to countries in need. In May, it provided a $350 million loan to Guyana to enhance its infrastructure.
Argentina’s government has confirmed that it will employ a $775 million loan from Qatar to make a payment to the International Monetary Fund (IMF), as it anticipates the approval of a disbursement from the IMF amounting to $7.5 billion.
This novel credit operation will enable Qatar to provide Argentina with Special Drawing Rights (SDRs), equivalent to $775 million.
“It is the first time in history that Qatar has carried out a credit operation with Argentina. This move will permit the South American nation to pay the maturity without using reserves,” a source from the economy ministry stated, as reported by The New Arab.
Negotiated “in absolute secrecy” by Argentine Economy Minister Sergio Massa and the Qatari economic team, the credit is part of Argentina’s strategy to avert further depletion of its troubled international reserves.
The Qatari loan, to be applied to the IMF interest payment, will subsequently be compensated with the disbursement that Argentina is awaiting from the IMF, following the expected approval of the fifth and sixth revisions of their agreement in mid-August.
This loan ties back to an agreement initially taken under the government of Mauricio Macri for $57 billion, renegotiated to $44 billion under President Alberto Fernandez.
Argentina also recently paid a maturity of $2.7 billion to the IMF through a currency swap with China and a $1 billion bridge loan from the Andean Development Corporation (CAF).
Given that exchange control systems have been operating in Argentina since 2019, Argentines historically rely on the dollar to counteract the depreciation of the Argentine peso.
Qatar has notably pledged 20% of its SDRs to the IMF in a concerted effort to support low-income countries in combating poverty and the effects of climate change.
This significant commitment was announced by Qatar’s Minister of Finance, Ali Al Kuwari, and the IMF’s Managing Director and Chairwoman, Kristalina Georgieva, at the Qatar Economic Forum (QEF) this year.
Reflecting on Qatar’s dedication, Georgieva told Doha News that Qatar is a “country that shows tremendous solidarity with those less fortunate.”
The Qatari pledge is set to support the IMF’s Poverty Reduction and Growth Trust and its Resilience and Sustainability Trust (RST), targeting the twin global challenges of poverty reduction and climate change.
Al Kuwari emphasised that the world faces unique uncertainties, including geopolitical tensions, high inflation, rising poverty and inequality. Through its pledge, the Gulf state is addressing these issues, bolstering economic growth, resilience, and job creation in impoverished nations.
In May, Qatar also provided Guyana with a $350 million loan.
This loan will facilitate the extension of the Schoonord to Crane four-lane highway in the South American country, showcasing Qatar’s continued commitment to international development and solidarity.
