[A-List] Argentina defaults on loan repayment

[Sabri Oncu <soncu@xxxxxxxxxxx>]

Are there any Argentines here who can comment on this? Sabri

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Financial Times

Argentina defaults on loan repayment
By Alan Beattie in Washington
November 15 2002 0:29

The Argentine government on Thursday took the extraordinary step
of defaulting on a loan repayment to the World Bank, in a sign of
its intense frustration over negotiations with the bank's sister
institution, the International Monetary Fund.

The decision not to make a due payment of $805m places Argentina
in the company of countries such as Iraq, Zimbabwe and Liberia in
defaulting on loans from international institutions.

It makes Argentina ineligible for any new lending from the bank
or reductions in interest rates on outstanding loans.
Disbursements from existing loans, around $2bn of which has yet
to be paid, will also be stopped if the country does not pay
within 30 days.

Alfredo Atanasof, chief of the cabinet, said: "The country's
level of reserves prevents it from paying the total of the quotas
that expire today." An interest payment of $79m would be made, he
said.

The World Bank confirmed it had received a partial payment. "The
World Bank welcomes statements from government officials that
Argentina remains committed to rectifying the situation as soon
as possible."

Economists said the decision showed Argentina's determination to
raise the stakes in negotiations with the IMF.

The government wants to have its $13bn debt to the fund rolled
over until the end of next year.

The IMF said on Thursday that it would allow Argentina to defer
its next loan repayment, due on November 22.