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Last Updated: Tuesday, 23 March, 2004, 10:09 GMT
Argentina awarded fresh IMF cash
Nestor Kirchner
Mr Kirchner had threatened to short-change creditors
The International Monetary Fund (IMF) has voted unanimously to give Argentina fresh funding of $3.1bn (1.7bn).

The money, the second payment under a $13.3bn rescue package agreed between the two last year, had been recommended by acting IMF boss Anne Krueger.

It was made possible after Argentina met a 9 March deadline for repayment to the IMF of arrears totalling $3.15bn.

Argentina needs the $13.3bn to help it continue to recover from a record debt default of $141bn in 2002.

Debt dispute

The IMF has warned Argentina that any future release of funds will depend upon successful negotiations with foreign creditors on defaulted debt.

Holding some $88bn in defaulted Argentine bonds, the overseas creditors have received no payment in more than two years.

Demonstration against IMF policies
Argentina's debts to the IMF have sparked popular unrest
Ms Krueger said: "The authorities are encouraged to work diligently to design a debt exchange offer that attains the highest possible creditor participation, reduce the risk of protracted litigation, and restores debt sustainability."

The Argentine Government, led by President Nestor Kirchner, has publicly offered - in rather forceful terms - just 25 cents for every dollar of debt it owes, but this has been rejected by both creditors and the IMF.

President Kirchner's government had also threatened to default on payment arrears to the IMF totalling $3.15bn, until the IMF gave it the latest $3.1bn.

Continuing efforts

But the Argentine Government then backed down and met the 9 March deadline for the arrears.

The latest decision of the IMF regarding the release of funds for Argentina was unanimous, unlike the split back in January, when eight of its board directors voted against any more new money for South America's second-largest economy.

Ms Krueger said it would now be important for Argentina to engage "in constructive negotiations with all creditor groups, or their representatives".

"Consistent implementation of this debt restructuring framework will be essential for the continued support of the international community."

Argentina set for fresh IMF cash
10 Mar 04  |  Business
Argentina 'pays IMF $3.1bn loan'
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Q&A: Argentina and the IMF
09 Mar 04  |  Business
Argentina plays 'chicken' with IMF
08 Mar 04  |  Business
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19 Dec 03  |  Business
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21 Sep 03  |  Business
Q&A: Argentina's economic crisis
12 Feb 03  |  Business

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