On Argentina's external public debt

Abstract

Argentina defaulted on its external public debt at the end of 2001, when the government crisis derived from the December 19-20 riots and the resignation of Femando de la Rúa's government was unleashed. Strictly speaking, the suspension of payments reached only private external creditors holding government securities, since international financial organizations (IMF, WB and IDB) and official organizations (Paris Club and external governments) continued to be paid until the end of 2002, when the transitory agreement signed between the Argentine government and the IMF in January 2003, suspending payments until August 2003, was already a fact.

It is worth considering that the external public debt as of December 2001 amounted to 144,279 million dollars, of which 57,310 million dollars (40%) were in government securities; as debt to international and official financial organizations, the sum amounted to 36,831 million dollars (26%), and to commercial banks and other creditors, mainly local, a figure of 50,138 million dollars (34%).

A differentiated policy was followed in these three tranches of public external debt. The first one was in default. The third was "pesified" to a large extent, with the conditions of a dollar equivalent to one peso and updated by the reference stabilization coefficient (CER) plus an interest rate. During 2002, the second tranche received some 4.3 billion dollars for the cancellation of principal and interest installments. The entire year 2002 was dedicated to negotiating with the IMF a framework agreement to renegotiate the debt as a whole.