Latin America
Related: About this forumArgentina reaches debt repayment deal with Paris Club
Argentine Economy Minister Martín Guzmán announced Tuesday that Argentina had reached an agreement with the Paris Club of creditor countries to avoid defaulting on a loan repayment in July.
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, Guzmán told reporters in the capital.
Argentina will instead make a $430 million payment in the short term - followed by the rest later.
The amount owed was the last repayment on debt renegotiated with the Paris Club in 2014 (then $9.7 billion).
Guzmán pointed out that the new payment dates were not yet fully defined - though the first payment would likely take place on July 31, with the second in March 2022.
Argentina will continue negotiations for rescheduling some $45 billion it owes the IMF - part of a record bailout granted to former President Mauricio Macri in 2018, reportedly at Trump's behest.
Guzmán's successful refinance of $66 billion in foreign debt last August (around a third of the total) trimmed the country's foreign debt service by 35% from a record $17.4 billion in 2019.
At: https://www.batimes.com.ar/news/economy/guzman-confirms-argentina-has-reached-deal-with-paris-club.phtml
Argentine Economy Minister Martín Guzmán holds a Zoom meeting this morning with the President of the Paris Club, Emmanuel Moulin.
The agreement reached today with the Paris Club of creditor nations averts a default on $2.4 million in Argentina's remaining debt with the club - as well as easing uncertainty in the debt-strapped nation.
Argentina still faces IMF payments of over $18 billion annually in 2022 and 2023, besides other foreign debt service of over $10 billion a year - mostly dating from former President Mauricio Macri's 2015-19 tenure, when massive foreign debts were taken on largely to finance the dollarization and offshoring of private assets.
Judi Lynn
(160,219 posts)It is still a nightmare thinking of what absolute destruction Macri would have brought had he lasted one more month in power.
He left the economy in shreds, compared to what it was when he arrived. Monstrous.
This clean-cut Economy Minister seems very capable, doesn't he? He looks much more open, direct, and honest than anyone who worked for Argentina under Macri's direction.
Argentina's Economy Minister Martín Guzmán
The last paragraph of the posted article is amazing. What greed and deceit Macri represented!
peppertree
(21,530 posts)Dollarization: The investors then trade the peso profits for dollars - with the central bank borrowing tens of billions to make sure the dollars are available.
Finance is deregulated, such that dollarization can take place with few (if any) restrictions.
Offshoring: When the 'bicycle' looks as though it's about to collapse, the dollars are quickly offshored (though many don't even wait that long).
The country is thus left with the massive foreign debts - plus all the economic damage done by measures such as raising interest rates to discourage excessive offshoring, as well as the crisis itself.
Sad enough to, well, cry for Argentina.
Thanks as always for reading and sharing, Judi. Have a great week!