Another Argentine Default
Argentina defaulted on a
World Bank loan in November when it failed to
make the full $805 million payment originally due October 15.
Instead, the government made an interest payment of $79.2 million.
Non-payment has probably cut off Argentina from all further support
from multilateral institutions, its only source of international
credit after last year's $144 billion default on its domestic and
international bonds.The World Bank says it assesses no penalties on
"loan payments made within 30 days of the scheduled due date. If a
payment becomes 30 days overdue, no new loans to the borrower can
be presented to the Bank's Board." Furthermore, the borrower no
longer becomes eligible for reduced interest charges falling due
over the following six months. World Bank interest charge waivers
are only available to countries that are current with debt
The Argentine government's decision to make only a token
payment came as a surprise because the World Bank had already
earmarked $600 million in fresh loans for...
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