Argentina reached an agreement Tuesday with a group of wealthy nations known as the Paris Club to finalise by June 30 a repayment programme on US$2 billion of debt.
The two sides last year had set a deadline to restart talks at the end of March as the country also held negotiations with the International Monetary Fund. The IMF’s Executive Board will vote on Argentina’s programme Friday, the final step of approval.
The extension gives Argentina more breathing room ahead of the IMF board’s vote, which would allow the country to refinance over US$40 billion in debt. Argentina is expected to receive US$9.8 billion from the IMF as soon as the board gives a favourable vote.
As part of the agreement with the Paris Club, Argentina committed to making partial payments to the club’s members, proportional to payments it makes to other bilateral creditors during the 30-month period of the country’s programme with the IMF. That’s in line with the conditions the two sides reached last year as well, when the US$2-billion repayment was postponed. Between last July and March, Argentina made partial payments to the Paris Club totaling US$430 million.
Paris Club President Emmanuel Moulin praised Argentina’s upcoming IMF agreement in a statement, saying its objective is “to strengthen Argentina’s macroeconomic stability and stimulate inclusive economic growth.”
by Patrick Gillespie, Bloomberg