On Monday, Economy Minister Sergio Massa announced that Argentina will pay US$2.7 billion to the International Monetary Fund (IMF) through resources obtained via an agreement with China and a loan from the Development Bank of Latin America (CAF).

“I want to assure you that Argentina will not use a single dollar from its reserves to meet today’s debt maturity,” he said, explaining that the CAF loan of US$1 billion was approved by 20 out of 21 countries of the Latin American financial institution.

The Chinese People’s Bank also decided to extend the use of the second tranche of the ‘swap’ that China has with Argentina, allowing the South American nation to access US$1.7 billion. This amount will be paid to the IMF in yuan.

“In this way, we protect our reserves in a year when the problem of the debt legacy with the IMF was compounded by the worst drought in history, which cost us over US$20 billion in lost exports and over US$5 billion in public income due to the loss of export taxes,” Massa stated.

He also criticized the US$44-billion credit contracted by President Mauricio Macri (2015-2019), calling it “the worst legacy” for the Argentine state because it “only served to finance capital flight.”

“It is a debt that did not leave any benefit for Argentine families in the form of roads, schools, hospitals, businesses, or improvements,” Massa recalled.

Last week, the IMF technical staff confirmed an agreement with President Alberto Fernandez’s administration, under which the international institution will advance US$7.5 billion to the country in August to meet the maturities of the 2018 loan granted to Macri.

As part of the new agreement, however, Argentine committed to maintaining the fiscal deficit in 2023 at 1.9 percent of the gross domestic product (GDP).