The Executive Board of the International Monetary Fund (IMF) officially announced the reduction of fees and surcharges after completing the review of the policy adopted in this matter, resulting in a relief of US$3.2 billion for Argentina. The organization confirmed, in a statement, the decision that had been announced days earlier, stating that the board "reached a consensus on the reforms of fees, surcharges, and commitment fees that will substantially reduce the cost of General Resources Account (GRA) loans at a time when global interest rates are high, while safeguarding the IMF's financial capacity to support its members in times of need."
In this context, it was reported that the margin paid on the Special Drawing Rights (SDR) interest rate and the time-based surcharge rate would be reduced, and the debt thresholds above which the surcharges and commitment fees apply would be increased. These changes will take effect on November 1, 2024. The Executive Board approved several important changes, such as reducing the margin paid on the SDR interest rate, increasing the debt threshold above which surcharges apply, aligning the thresholds for commitment fees with general access limits, and reducing the time-based surcharge rate.
The decision comes during the start of the IMF’s annual assembly, which brings together economic management officials and central bankers from around the world. The Fund expects that the package of reforms will reduce the IMF’s borrowing costs for members, generate significant annual savings, and decrease the number of countries that will pay surcharges in the future.
From the Argentine Ministry of Economy, it was specified that the policy change represents a savings of approximately 3.2 billion dollars for the country, which corresponds to a reduction of 29.1% in the payment of fees and surcharges for the entire current loan. These benefits are expected to be particularly felt during the next three fiscal years, with an approximate reduction of 1.1 billion dollars.
