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Argentina to make loan payments to World Bank

Argentina announced on Friday (Aug 15) it will make over US$3 billion (S$3.7 billion) in payments on loans due this year to international financial institutions, including the World Bank and the Inter-American Development Bank.

BUENOS AIRES: Argentina announced on Friday (Aug 15) it will make more than US$3 billion (S$3.7 billion) in payments on loans due this year to international financial institutions, including the World Bank and the Inter-American Development Bank.

The move comes even as the government stands in technical default on other debt over its refusal to pay US$1.3 billion to settle a dispute with hedge funds holding Argentine bonds from an earlier default in 2001.

A US judge, who ruled in favour of the hedge funds, has blocked Buenos Aires' payment of US$539 million to creditors who accepted a 70 per cent write-down on previously defaulted bonds, until Argentina also pays the hedge funds which have held out for full payment.

Jorge Capitanich, Argentina's presidential chief of staff, said US$3 billion is being drawn from the central bank's reserves to make payments due the international financial institutions.

Argentina's reserves currently stand at about US$29 billion, about half what they were in 2011. Analysts attribute the decline to capital flight in the face of an unstable peso and annual inflation of more than 30 per cent.

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