Ruben Vidaurreta

 

357L

 

"Argentina Under Pressure to Agree with IMF as US Refuses to Extend Loan," Wall Street Journal, 6/18/84.

 

The U.S. Treasury announced on 6/15/84 that unless Argentina reaches an agreement with the IMF on an economic austerity program it would refuse to extend a $300 million loan commitment to that country.   Argentina’s foreign creditor banks also withdrew its plans to lend $125 to meet its already late interest payments.  This news came after Argentina rejected the proposals of the IMF team assigned to it.  Most of the loans would have been used to pay back Mexico, Colombia, Brazil, and Venezuela $300 they lent to Argentina last March to help it meet overdue interest payments.  Argentina’s response to actions of the Treasury was rather “muted” because it was planning to meet later this week with its creditors to discuss ways to pay or postpone portions of its debt.  The response of the foreign banks was also “muted,” because original agreements stated that they be paid back in Argentine exports, thereby crediting their trade accounts with Argentina.  U.S. bankers also decided to drop a proposed $125 million loan to Argentina thus making Argentina responsibly for coming up with all of the money itself.  If Argentina does not pay its interest payments by the deadline banks would be forced to move the loans into “non-accruals” and effectively force them to subtract the amounts from quarterly earnings.  The 11 bank-committee that had plans to lend Argentina $125 million said it would still do so only if Argentina came to an agreement with the IMF.