Inter-American Development Bank blocks USD 500 million loan to Argentina

Development Bank loan Argentina
Barely settled in office as Argentina’s Economy minister, Silvina Batakis already faces a 53-percent rejection rate. Photo: Matías Martín Campaya/EFE

Economy Minister Silvina Batakis of Argentina is in Washington D.C. to meet with the International Monetary Fund (IMF) and the U.S. Secretary of the Treasury looking for reassurance from Argentina’s largest foreign creditor.

But the focus of Ms. Batakis’ trip took a turn today, when Inter-American Development Bank (IDB) head Mauricio Claver-Carone published a letter arguing that Argentina should not receive USD 500 million in funding that the government was counting on between now and the end of the year.

Mr. Claver-Carone, who had already called the country “insolvent” in IDB board meetings, now argued that “Argentina’s tumultuous financial record uniquely affects the bank’s costs” and that the IDB cannot “rubber-stamp” requests for new funds because it “must protect its ability to reliably help all its 26 borrowers, including small countries with few resources.”

The IDB head, appointed under the Donald Trump administration, is seen as a pro-U.S. hardliner. President Alberto Fernández actively lobbied against his bid to lead the IDB, saying the organization should respect its tradition of finding leaders in Latin America and the Caribbean.

Desperate for hard currency to finance a balance of payments crisis, Argentina is expected to protest the IDB’s position — but the country is facing an uphill battle in Washington since last month’s resignation of Martín Guzmán, the architect of the country’s restructuring deal with the IMF.