BUENOS AIRES, Aug 5 (NNN-AGENCIES) — The head of the International Monetary Fund, Kristalina Georgieva, hailed the debt deal reached by Argentina and its creditors over the restructuring of a $66 billion debt as a “very significant step.”
Georgieva congratulated Argentine President Alberto Fernandez and the three major creditors on the agreement in principle, which came after months of wrangling and extensions.
“Look forward to a successful conclusion in the interest of all,” Georgieva said on Twitter.
Recession-hit Argentina announced Tuesday it has reached an agreement with three major creditors over the restructuring of a US$66 billion debt as it seeks to solve its latest sovereign default crisis.
The government of President Alberto Fernandez had set an Aug 4 deadline to complete a deal but it has now pushed the date to Aug 24 “to give effect to the agreement,” which came after months of wrangling and extensions.
“We resolved an impossible debt in the biggest economic crisis in memory and in the midst of the pandemic,” said a delighted Fernandez. “Now the horizon is clear for where we want to go to.”
Argentina’s economy ministry said in a statement that the deal “will allow members of the creditor groups and such other (bond) holders to support Argentina’s debt restructuring proposal and grant Argentina significant debt relief.”
The bonds, issued under foreign legislation, represent roughly a fifth of the country’s US$324 billion debt, which amounts to around 90% of its gross domestic product.
Argentina has been in default – for the ninth time in its history – since May 22 when the country missed a deadline to pay US$500 million in interest on the debt that is subject to the current negotiation. It missed another deadline last week to pay US$600 million more.
In recession since 2018, the Argentine economy has been further punished by the coronavirus pandemic. The IMF estimates it will contract by 9.9% this year.
More than a third of the 44 million population live in poverty and annual inflation stands at over 50%. — NNN-AGENCIES
