Argentinean President says debt negotiations are ongoing

BUENOS AIRES (Xinhua) – Argentinean President Alberto Fernandez said last Saturday negotiations with private creditors to restructure part of the country’s foreign debt are ongoing, and the goal of his administration is to avoid defaulting.

According to official schedule, creditors were supposed to rule last Friday on the government’s restructuring proposal, which includes 5.4 per cent cut to the principal payment and 62 per cent interest reduction, plus a three-year grace period. The amount to be restructured stands around USD68 billion.

“Objectively, creditors are not losing,” Fernandez said in defence of Argentina’s proposal.

“They only earn less in a world that has been turned upside down” due to the novel coronavirus pandemic.

The new proposed rate of interest would drop from seven per cent to about two per cent, and the president said Argentina is offering to pay two per cent interest “in a world that
pays zero”.

“The capital owed to them is practically intact,” said Fernandez. “Only five per cent is affected.

“We have a sort of endorsement from the main auditor of international finance, which is the (International) Monetary Fund (IMF) and the truth is that our proposal keeps 100 per cent the sustainability criteria that the Fund has proposed. I hope this time, (the creditors) understand and accompany us.”

In 2018, the Argentinean government brokered an agreement with the IMF that would release funds to the country but would also require Argentina to work toward restoring public debt sustainability.