Press Release No. Press Release No.02/2

Press Release: IMF Extends Argentina's SRF Repayment by One Year

January 16, 2002

The Executive Board of the International Monetary Fund (IMF) today approved a request from Argentina to extend by one year the repayment of SDR 741 million (about US$933 million), which is due on January 17, 2002 under the Supplemental Reserve Facility (SRF).

The IMF approved financing for Argentina under the SRF as part of a stand-by credit on January 12, 2001, to ease a short-term financing constraint (see Press Release No. 01/3). Repayment of an SRF is normally expected in two installments made at one year and at 1½ years after the SRF disbursement, which in Argentina's case would be on January 17, 2002. A borrower may request an extension of up to one year of the expected repayment period under the SRF. An extension can be granted if repayment would cause undue hardship and provided the borrower is taking actions to strengthen its balance of payments¹. At the end of the extension, in this case on January 17, 2003, the country is obligated to repay the SRF.

In commenting today's decision by the IMF Executive Board, IMF Managing Director Horst Köhler said:

"The decision of the Board shows the Fund's desire to help Argentina overcome its difficult economic and social situation. The Board welcomed the Argentine authorities' commitment to work closely with the IMF and develop a comprehensive strategy to restore sustained growth. The IMF stands ready, in cooperation with the World Bank and the Inter-American Development Bank, to assist in the development of such a strategy. The Fund will focus in core areas such as the exchange rate regime, the banking system, the fiscal policy framework and monetary policy regime."