The president of Argentina has vowed to continue paying off the country’s creditors despite a ruling by the US supreme court that could push the country close to defaulting.
The court ruled that the South American country must pay 1.3 billion dollars to hedge funds who had refused to join in debt restructuring deals before it pays anyone else. It also refused to hear an appeal.
Argentina defaulted in 2001 following its economic crisis. More than 92 percent of investors agreed to write off two-thirds of the debt. Hedge funds, who bought around 7 percent of the debt at a deep discount, refused to negotiate and are demanding full payment.
Cristina Fernandez said she refused to subject her country to ‘extortion’ and vowed the country would meet its obligations to those who had helped Argentina.
“I want to address the millions of Argentineans who are listening but also the 92 percent of creditors who believed in Argentina. I want to tell them that Argentina will meet its obligations. Argentina will not default on its structured debt,” Fernandez said in a televised address.
The International Monetary Fund has said it is worried that the rulings against Argentina could make it more difficult for other countries to restructure their debt and mean they are vulnerable to ‘vulture funds.’