Panama Short on Last Bond Payment
Panama, racked by economic and political strife, informed Japanese investors that it cannot make a $39-million bond payment that was due Thursday, bankers said.
The country has blamed its failure to make the final payment on the 10-year bonds on a cutoff in dollars by the United States, they said.
The move could mean that Panama will be shut out of borrowing in the bond markets, worsening its economic position.
Given the confused economic and political situation in Panama, Japan has decided against declaring the country in default for failing to make the payment, bankers said.
“One very big problem is which government is the legitimate one,” one banker said.
Japanese Foreign Ministry spokesman Yoshifumi Matsuda told a news conference that Tokyo has not decided which government to recognize.
“The situation in Panama is still fluid,” he said. “I don’t think we can make any quick decision.”
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