Home / 2020 / Q3 / Argentina and Ecuador's debt: Questions far from over

Argentina and Ecuador's debt: Questions far from over

Argentina and Ecuador's debt: Questions far from over

September 30, 2020 | Charles Newbery
Debt relief in the midst of a pandemic came as welcomed news to Latin America’s serial defaulters. Even if the pandemic clears, questions linger on their financial outlooks.

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In August, when Argentina and Ecuador reached deals with their creditors to restructure billions of dollars worth of foreign law bonds, leaders of both cash-strapped countries were visibly ecstatic. Ecuadorian President Lenín Moreno called it a huge relief. Argentina’s Alberto Fernández broke the social-distancing measures for COVID-19 to hug his economy minister. There was reason to cheer. Argentina swapped $66 billion and Ecuador $17.4 billion in old debt for new bonds with longer repayment terms, lower interest rates and debt relief. Argentina has a breather on principal payments until 2025; Ecuador until a year after that. But there’s no time to waste. “The debt restructuring provides an

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