The deadline for debt restructuring negotiations between the Argentinian government and its international creditors arrives today.
Discussions have been extended twice in the last two months. Today’s deadline falls beneath the shadow of Argentina’s recent default on a $500 million bond interest payment last month.
Restructuring $65 billion in foreign debt is essential for an economy that has been plagued by contraction, high inflation and unemployment, a currency crisis and rampant poverty for the past three years. The negotiating parties have traded proposals over the last few months, gradually narrowing the gap between what the South American nation is willing to pay and bondholders’ demands.
Argentina has sweetened its most recent restructuring offer, departing from its initial request of $40 billion in debt relief. The government may include warrants linked to agriculture exports to appease top creditors. The current path of negotiations has received the IMF’s endorsement, which necessitates guaranteed debt sustainability to secure inclusive economic growth. Today’s deadline will likely be extended yet again as the government finalises amendments, looking to secure a comprehensive deal with creditors.
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Bryan serves as a research analyst and editor on the Current Developments Team, focusing on economic trends, development and geopolitics in Latin America and the Caribbean.