Argentina tells UN diplomats it faces 'technical default'

Now Reading:

Argentina tells UN diplomats it faces 'technical default'

Text size Aa Aa

Argentina’s economy minister has warned UN diplomats in New York that the country is headed for default after a US Supreme Court ruling favoured holdout creditors seeking payment on bonds it defaulted on in 2001 and 2002.

The country says it faces an unsurmountable payment to all bondholders.

“We’re being pushed into a technical default. Whatever way you look at it, this ruling puts Argentina at risk of an economic crisis. Argentinians are facing a situation that is twice as bad as it was in 2001,” said Axel Kicillof, Argentina’s economy minister.

Argentina says it is being ordered to pay around 1.1 billion euros while the holdouts claim that figure will increase to 1.2 billion euros by June 30 because of accrued interest.

Argentinian President Cristina Fernandez de Kirchner has said the country will not pay the investors.

Despite the tough stance taken by both sides, the financial markets believe a solution will be found.