Argentina Delays Payment on $10 Billion of Its Debt

From Reuters

entina has postponed payment of $10 billion in foreign debt and will hold talks here in the near future with the International Monetary Fund on a rescheduling package, Treasury Secretary Mario Brodersohn told reporters on Sunday.

“We have obtained a 180-day refinancing until we can discuss all matters related to the foreign debt,” Brodersohn said on return from talks with the IMF in the United States.

He said Argentina had postponed payment of $7.5 billion in debt arrears and $2.5 billion in commercial and financial credit lines for Argentine banks abroad.

Brodersohn was accompanied by negotiators Jose Luis Machinea, president of the central bank, and Foreign Debt Under Secretary Juan Sommer.


Bankers in New York have said that interim measures to roll over maturing debt are needed to give the two sides time to work out a longer-term new loan and rescheduling package.

Brodersohn said Argentina had not yet been granted a new standby loan on its $50-billion foreign debt.

“What we have advanced in new talks with (IMF President Jacques) de Larosiere is the possibility of an agreement with the fund. We hope that a mission (from the IMF) will come this month to continue with the negotiations,” he said.

Argentina, which is seeking new loans of between $1.2 billion and $1.5 billion, is hoping the loans will be linked to future fluctuations in world agricultural prices.


“We pointed out (to the IMF) the effect on Argentina’s balance of payments of the 40% drop in international prices over the past five years,” Brodersohn said.

He added that the negotiating team had emphasized the fall in world agricultural prices, saying it was the direct result of protectionism in the United States and Europe.