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Argentina to make loan payments to World Bank

AFP | Last Updated: Friday, August 15, 2014 - 22:22

Argentina announced Friday it will make more than $3 billion in payments on loans due this year to international financial institutions, including the World Bank and the Inter-American Development Bank.

The move comes even as the government stands in technical default on other debt over its refusal to pay $1.3 billion to settle a dispute with hedge funds holding Argentine bonds from an earlier default in 2001.

A US judge, who ruled in favor of the hedge funds, has blocked Buenos Aires` payment of $539 million to creditors who accepted a 70 percent write-down on previously defaulted bonds, until Argentina also pays the hedge funds which have held out for full payment.

Jorge Capitanich, Argentina`s presidential chief of staff, said $3 billion is being drawn from the central bank`s reserves to make payments due the international financial institutions.

Argentina`s reserves currently stand at about $29 billion, about half what they were in 2011.

Analysts attribute the decline to capital flight in the face of an unstable peso and annual inflation of more than 30 percent.

First Published: Friday, August 15, 2014 - 22:21
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