Argentina owes the People’s Bank of China about $2.9 billion
this month and $1.9 billion July, according to central bank data released last
month.
An agreement between Argentine authorities and IMF staff
last month on the latest review of the country’s program included a firm
commitment to refinance or roll over the debt, which was drawn down from an
existing $18 billion swap line between Beijing and Buenos Aires, according to
people familiar with the deal, who asked not to be identified as the
information isn’t public.
The rollover commitment clears a major obstacle for
Argentina’s $43 billion IMF program, as the government must show it has
so-called financing assurances to manage its enormous debt pile.
The details of the rollover or any refinancing weren’t
immediately available. One of the people suggested Argentina could repay some
of the debt while rolling over the majority of it.
The IMF declined to comment. Argentina’s central bank did
not immediately respond to a request for comment on Tuesday. China’s embassy in
Washington also did not immediately respond.
The Washington-based lender’s executive board is scheduled
to vote on the agreement Thursday, Economy Minister Luis Caputo said Tuesday.
The IMF will publish the staff-level agreement after vote.
Caputo said in April that Argentina is starting talks for a
new IMF financing program that could involve fresh funds, adding that Milei’s
monetary and foreign exchange plans are part of the discussion.
Former President Alberto Fernandez’s government last year
used some of the money from China to pay off part of its loan from the IMF,
something that no fund member has done in its 80-year history. It also used the
Chinese funds to finance imports as it ran low on dollars.
China’s swap is the largest source of foreign gross reserves
in Argentina’s central bank, whose debts are currently larger than its assets.
It’s also the biggest yuan swap line in the world.
On the campaign trail last year, Milei raised questions
about the future of Argentina’s relations with China if elected, calling the
Chinese “assassins” and “communists.”
But in an April interview with Bloomberg News, the president
adopted a much more pragmatic tone, avoiding incendiary remarks and assuring he
wouldn’t touch the currency swaps.