Argentina has reacted angrily to a US Supreme Court ruling which said it will have to pay $1.3bn to bondholders.
Buenos Aires claims paying up will force it to default as it has limited funds.
Ratings agency S & P has already cut Argentina’s credit rating by two notches to “CCC-” in the wake of the court’s decision.
The move makes it more expensive for Argentina to borrow money.
Argentine Economy Minister Axel Kicillof:
“We’re also going to send our lawyers to talk to Judge Griesa. That’s what I am going to instruct at this moment on behalf of the President of the nation. On the one hand take steps for a restructuring under local legislation, on the other hand to send our lawyers to speak to Judge Griesa to see what he is referring to when he says he isn’t pushing Argentina into a default with this ruling.”
The threat of a financial crisis for South America’s second biggest economy has sparked protests.
The problem stems from when Argentina negotiated a debt swap at a reduced rate with investors back in 2001. Those who refused the terms have been fighting to be paid in full ever since. The US court has now ruled in their favour.