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Argentina has reached an agreement to avoid further disruption by delaying the $ 2.4bn delay by a group of rich countries by the end of July, Finance Minister Martín Guzmán said on Tuesday.
Argentina is now at the end of March to join called Paris Club of 22 countries, including the US, Germany, Japan and France.
Guzmán said Argentina could pay only $ 430m in two installments, the first on July 31, and the 60-day grace period to repay $ 2.4bn by the due date on May 30. The agreement will save the country $ 2bn in the next eight months, Guzmán said.
The deal will provide a respite for Argentina’s struggling economy, where foreign exchange has fallen sharply despite rising commodity prices over the past few months.
“Resolving our debt crisis that we cannot afford is a vital pillar of economic stability,” Guzmán told a news conference in Buenos Aires. He also said that this will help reduce annual inflation, which is moving at about 49%.
The alliance with the Paris Club comes as negotiations $ 45bn IMF has given Argentina money since the 2018 financial crisis in the former Mauricio Macri government.
Local analysts say talks with the IMF were marred by political instability, with mid-term elections approaching in November, when the government would not want to cut its necks because of a cut in the deal agreed with the international lender.
Although Argentina was initially expected to join the IMF early last year – soon to recoup its $ 65bn debt – the lack of a commitment to reduce the country’s economic downturn was difficult to negotiate with the Paris Club.
“Paying the bill would be detrimental to the world’s reserves and bring about a change in the economic and economic downturns,” Guzmán said, adding that the non-payment would disrupt the economy and create serious doubts.
Guzmán explained that the government will continue to negotiate “binding” with the IMF, and that the March and Paris Club deadlines “are not in line with the IMF’s goal. Our goal is to find a good deal, as soon as things get better, but first and foremost.”
The 38-year-old ministry also said that the most important thing in the deal with the Paris Club is that Argentina will do the same for its creditors, to allay Japan’s concerns that Argentina is paying off its debts to China but not to the Paris Club.
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