BUENOS AIRES, June 23 (NNN-AGENCIES) — Argentina said it had
reached an agreement with the Paris Club of creditor countries to avoid
defaulting on a loan repayment in July, unlocking temporary relief of some $2
billion.
“We have reached an understanding with the Paris Club” to avoid defaulting
on July 31, when a grace period was to expire for the repayment of a final
tranche of debt of about $2.4 billion, Economy Minister Martin Guzman told
reporters.
Instead of $2.4 billion, Argentina will repay $430 million in the short
term, followed by the rest later.
The $2.4 billion was the last repayment on debt renegotiated with the Paris
Club in 2014.
Paying the amount, said Guzman, “would have been a blow to international
reserves, (and) would have generated more exchange rate instability and more
macroeconomic instability.”
A default, on the other hand, would have similarly been a hard blow to the
economy.
The new repayment dates have not been defined, Guzman added, but the first
would likely be by July 31 and the second in 2022.
Argentina will continue negotiations for repayment of some $44 billion
borrowed from the International Monetary Fund by the previous government in
2018.
“Our goal is to have a good agreement, the sooner the better, but the
priority is that it be good,” said Guzman.
Argentine President Alberto Fernandez visited European countries in May to
drum up support for a delay in its debt repayments to the Paris Club and IMF.
In March, he said the debt in its current form was “unpayable.”
Argentina has been in recession since 2018, a situation worsened by the
coronavirus epidemic. In 2020, GDP declined nearly 10 percent and poverty now
affects about 42 percent of the population.
Last year, the country restructured some $66 billion in debt. — NNN-AGENCIES
