Financial Times IMF plays down Argentina debt default By Peter Hudson in Buenos Aires and Caroline Daniel in Washington
November 16 2002 The International Monetary Fund on Friday played down the significance of Argentina's default on debt repayments to the World Bank, its sister institution. A statement by Anne Krueger, the fund's first deputy managing director, declared: "We expect discussions will continue in the coming days." It added that the fund's management would recommend to the executive board an extension on a loan payment due on November 22. "We are not shocked," a fund spokesperson said. "We were not operating under any deadline and we never tried to set the stage for this week being a big decision." Argentina paid only $79.2m against a scheduled repayment of $805m. Although that means it is no longer eligible for fresh loans or reduced interest rates on current debt, the bank will continue to disburse funds for 30 days under existing agreements. Argentina remains optimistic that it can reach a deal with the fund. "Our impression is that we moved forward a great deal on technical issues," a senior government official said. The Argentine Congress was in danger of undermining that progress, however, with attempts to pass laws protecting bank debtors from foreclosure and allowing them to use government bonds to pay their debts. President Eduardo Duhalde took the decision to postpone payment to the World Bank in order to force politicians to back the accord, the official said. Paul O'Neill, the US Treasury secretary, expressed hope for a deal. "Our position continues to be supportive of the IMF and the Argentinians reaching an agreement that will provide for sustainable economic growth in Argentina, and as quickly as possible, putting that country back into a position where its people have an opportunity to grow and be employed again." Article at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/ FullStory&c=StoryFT&cid=1035873342016&p=1012571727088
