Argentine President Alberto Fernandez said today, Sunday, that negotiations with private creditors to restructure part of the country’s external debt are continuing, and that the goal of his administration is to avoid default.
On Friday, according to the official schedule, creditors were supposed to decide on the government’s restructuring proposal, which includes a 5.4% reduction in major payments and a 62% interest reduction, in addition to a three-year grace period, and the amount to be restructured is about 68 billion. American dollar.
“Objectively, creditors do not lose,” Fernandez said, defending Argentina’s proposal, noting that “they are earning only less in a world turned upside down” due to the pandemic of the new Coruna virus.
The proposed new interest rate will drop from 7% to about 2%, and the President said that Argentina offers to pay interest of 2% “in a world that pays nothing.”
Fernandez noted that “the capital due to them in practice has not been affected,” explaining that “only 5% is affected.”
“We have some kind of endorsement from the chief auditor of international finance, which is the International Monetary Fund, and the fact is that our proposal maintains 100 percent sustainability criteria proposed by the fund. I hope this time they (the creditors) understand us and support us,” he said.
In 2018, the Argentine government brokered an agreement with the International Monetary Fund that provides for the granting of funds to the country but also requires Argentina to work towards the recovery of public debt sustainability.
According to local analysts, although negotiations are continuing, the Argentine government should announce an agreement by May 22, as the grace period for pending interest of US $ 500 million will end that day.
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