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Last Updated: Tuesday, 9 March, 2004, 17:31 GMT
Argentina 'pays IMF $3.1bn loan'
Argentine president Nestor Kirchner
Hard-pressed President Kirchner has been calling for a fresh IMF review
Argentina has paid $3.15bn of loans to the International Monetary Fund (IMF), according to reports.

Last-ditch talks had been taking place, as Argentine President Nestor Kirchner mulled over whether to default before the 2200 GMT deadline arrived.

It is now reported that he and the acting managing director of the IMF, Anne Krueger, spoke for 30 minutes today before reaching an agreement.

Any non-payment would have been the second such occurrence in six months.

Both Argentina and the IMF have declined to make any official comment.

Progress report

Last year Argentina was responsible for the single biggest missed payment in the IMF's history - $2.9bn, and further missed payment could halt any more aid.

Argentina is recovering from a world-record sovereign default of $141bn in early 2002.

The Kirchner government has said it wants its private creditors to accept a 75% reduction in the face value of the foreign debt

The country has been pressing for a second "progress review" with the IMF, which, if approved would realise funds back to the government.

Reports say Ms Krueger will recommend the IMF's lender board approves a second review of a $13.3bn loan deal, which would keep the economy moving along.

Argentina is looking to leave behind its 2001-2002 economic crash.

Government bonds

The IMF has been unhappy with progress in Argentina's negotiations with individual and institutional creditors owed $88bn in defaulted bonds.

Investors are angry because further IMF loans were made to Argentina in September on the understanding the government repaid bondholders.

The Kirchner government has said it wants its creditors to accept a 75% reduction in the face value of the foreign debt, a proposal that has been strongly rejected by many creditors and IMF officials.

After four years of recession, Argentina's economy is recovering and grew 8.4% in 2003, according to preliminary government statistics.

Forecasts call for growth of 6.9% in 2004 although the jobless rate is expected to remain in double figures.

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