S. Africa, Banks Reach Accord

Representatives of South Africa and 30 international banks holding $14 billion of Pretoria’s frozen debts have agreed on a first step to restore normal repayment procedures, a Swiss mediator announced today.

Fritz Leutwiler, a retired Swiss central banker, said the U.S. and European banks had a “broad consensus” in favor of his proposal that 5% of the outstanding debt be repaid soon, and said the South Africans had agreed reluctantly. Leutwiler said it was not a rescheduling agreement but a short-term step until a “major review” of South Africa’s financial situation due 12 months from now.