Qatar agreed on Friday to loan Argentina $775 million to help it repay the International Monetary Fund.
The loan is part of a facility agreement that Argentina’s economy minister, Sergio Massa, negotiated with Qatar. The IMF’s 4.033% annual interest rate will apply to the loan, reported telam, Argentina’s state media outlet.
Argentina is in the midst of another financial crisis, this one marked by hyperinflation and declining central bank reserves. The South American country is also in the process of repaying the IMF following a $44 billion loan agreement last year. The Argentines will use the Qatari funds to make a payment to the IMF on Friday, according to Reuters.
Why it matters: Qatar has a history of using its oil wealth to support struggling countries. It deposited $3 billion in the Central Bank of Egypt last year to help the North African country weather its own economic crisis. In addition, Qatar disburses a monthly grant to help sustain the Palestinians in the Gaza Strip.
Know more: Argentina is also turning to China amid its fiscal crisis. In April, the government said it would start paying for Chinese imports in yuan, as opposed to US dollars, and in June, the central bank began allowing private banks to open accounts in the Chinese currency. Argentina also reached a loan agreement with the People’s Bank of China this week for a loan in yuan equivalent to $1.7 billion to help repay the IMF.
Middle Eastern states are also showing a growing interest in using the yuan for trade. In March for the first time, China purchased Emirati gas in yuan. Iraq’s central bank also announced in February that it would use yuan for trade with China.