Economy

Argentina hopes to get a Paris Club $2.4 billion debt extension, local media says

Argentina's Peronist government is optimistic about gaining an extension on a $2.4 billion repayment to the Paris Club of country lenders

Argentina's center-left President Alberto Fernandez
Photo: Government of Argentina/Website
  • Argentina’s center-left President Alberto Fernandez has been lobbying hard in recent weeks to defer the payment;
  • Argentina is now locked in talks with the International Monetary Fund to push back some $45 billion in payments it cannot meet.

Argentina‘s Peronist government is optimistic about gaining an extension on a $2.4 billion repayment to the Paris Club of country lenders, local media said on Sunday ahead of the deadline for the debt next week.

Argentina‘s center-left President Alberto Fernandez has been lobbying hard in recent weeks to defer the payment, which is technically due on Monday but has a 60-day grace period before the South American country would fall into default.

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“The national government trusts that the steps taken by President Alberto Fernández days ago, before the highest authorities of European countries, will lead to the postponement of the payment,” state news agency Telam reported.

Argentina, which restructured over $100 billion in private debt last year following its ninth sovereign default, is now locked in talks with the International Monetary Fund to push back some $45 billion in payments it cannot meet.

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The grains producing nation, once a global powerhouse but in recent decades beset by economic crises, has been stuck in recession with inflation rampant since 2018 despite the IMF extending a record loan to the country that year.

The influential La Nacion newspaper said that while there was frustration with Argentina‘s repeat defaults, Paris Club member nations were likely to give the country’s a “bridge” period to pay back the debt, even if there were strings attached.

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An Argentine government source told Reuters on Sunday that “the dialogue (with the Paris Club) is good” without giving further details.

Argentina‘s already hard-hit economy has been pummeled by the coronavirus pandemic, with a sharp second wave now crashing in the country, which currently has one of the world’s highest daily average death tolls per capita.

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