Buenos Aires, Argentina – The World Bank announced Thursday that it is preparing to support up to $2 billion worth of loans to help Argentina refinance its debt at lower costs.
The loan, which Argentina is negotiating with a private bank, will be repayable over six years and will be funded almost entirely by two World Bank institutions, the International Bank for Reconstruction and Development and the Multilateral Investment Guarantee Agency. bloomberg It has been reported.
Meanwhile, the IMF is preparing to spend an additional $1 billion of the $20 billion it provided to the country last year, as the White House rallies support for its ally, Argentine President Javier Millais.
The assurances will be welcome news for Miley, whose approval rating has fallen to a low of 36.4% in recent polls as monthly inflation soars to its highest level in a year.
The World Bank’s announcement followed a meeting between Argentina’s Economy Minister Luis Caputo and World Bank President Ajay Banga.
Caputo posted a photo with Banga on social media following the announcement, captioning it, “Thank you Ajay and the team!”
The minister is currently in Washington attending an IMF meeting to find funds to refinance Argentina’s debt. He told investors earlier this week that Miley’s government would not need to access global capital markets this year due to cheaper financing options.
Argentina is said to be negotiating interest rates of around 5%, which would be much better than the 9% bond yields it would face if it returned to global capital markets.
A separate agreement was reached with the IMF last Wednesday that, if approved by the IMF board, would give Argentina access to $1 billion.
The country already has a $20 billion IMF program underway and could secure another $20 billion through a swap line with the U.S. Treasury.
The World Bank Group “reaffirmed its strong support for Argentina’s reform efforts to strengthen conditions for growth, investment and job creation, including measures to improve financial conditions and strengthen market and investor confidence,” the World Bank Group said in a statement Thursday.
