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Argentina avoids default on debt with “Paris Club”


Argentina has agreed to avert another major default by delaying the bulk of its $ 2.4 billion payment to a group of rich countries in late July, Economy Minister Martin Guzman said on Tuesday.

Argentina now has until the end of March to reach an agreement The so-called Parisian club Of the 22 countries, including the United States, Germany, Japan and France.

Guzman said Argentina would pay only $ 430 million in two installments before that, the first on July 31, when the 60-day grace period of $ 2.4 billion, originally paid on May 30, expires. The deal would effectively save the country $ 2 billion over the next eight months, Guzman said.

The deal will provide some breathing room for Argentina’s struggling economy. Foreign exchange reserves have been significantly depleted, despite rising commodity prices in recent months.

“Resolving our volatile debt problem is a fundamental pillar of the process of restoring economic stability,” Guzman told a news conference in Buenos Aires. He said it would help alleviate annual inflation, which is running at almost 49 percent.

The agreement with the Parisian club comes as follows negotiations The International Monetary Fund (IMF) has suspended the repayment of $ 45 billion in loans to Argentina following the 2018 currency crisis during the previous government of Mauricio Macri.

Local analysts say talks with the IMF have stalled for political reasons, with midterm elections approaching in November when the government is reluctant to block tough budget cuts agreed with a multilateral lender.

Although Argentina was initially expected to reach an agreement with the IMF last year, it owed debt to private creditors shortly after a successful $ 65 billion restructuring, the absence of a deal containing a commitment to reduce the country’s inflated fiscal deficit. negotiations with the Parisian club.

“Paying that amount would be a blow to international reserves; it would create more exchange rate instability for the macroeconomy in general,” Guzman said, adding that default could destabilize the economy and create more uncertainty.

Guzman clarified that the government will continue “constructive” negotiations with the IMF, մարտ the March deadline with the Paris Club “has nothing to do with the goals of the agreement with the IMF.” “Our goal is to get a good deal, the sooner the better, but the priority is to make it good.”

The 38-year-old added that another important element of the agreement with the Parisian club was that Argentina would treat its creditors equally, in Japan Aponia, to allay fears that Argentina would pay its debts to China rather than the Parisian club.



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