Argentina and the IMF
Shortly before the deadline imposed by the IMF, the Argentine President Nestor Kirchner ordered to transfer a payment of $3.1-billion to the fund, the Guardian, the Globe and Mail, and the Buenos Aires Herald reported. Argentina had threatened to default claiming that a payment to the IMF would result in cancelling payments to schools and hospitals. The payment was made after President Kirchner agreed to negotiate a fair deal with its private creditors and the IMF acting director Anne Krueger agreed to recommend approval of the second review on a three-year 13.3-billion-dollar loan accord signed last September when the fund sits on March 22, 2004. The country owes about $90 billion to banks and private investors in Europe and North America. It has made no payments on these loans since December 2001. The Argentine government is offering $0.25 in the dollar while investors believe that the country could easily afford $0.65 in the dollar because of its growing economy.
Argentina, Brazil and Turkey are the largest borrowers of the IMF. A default on a loan by one of these countries could force the fund to raise borrower rates to its other clients to make up for the losses. However, half of Argentina's population has slipped into poverty as a result of the 2001 financial crisis.