Argentina to pay off IMF debt

December 28, 2005 President Kirchner says that Argentina will be able to pay off its IMF debt of US$9.8 billion dollars next week following the New Year weekend. The announcement has come with great applause at home, but according to CNN it has led to a temporary decrease of the value of the Argentine peso in international markets. Payment was originally scheduled for 2008, and paying off the debt early will save Argentina around $1 billion dollars. The payment is made out of the Central Bank foreign currency reports, which according to CNN total $28 billion.

The economic crisis in Argentina started with a recession in 1999. People began to withdraw money from their accounts, which resulted in the government freezing bank accounts. Eventually the country would have to default on a large part of their public debt. The crisis led to the increase of the income gap between the rich and the poor, but policies in recent years have brought that back down to previous levels. Argentina had previously renegotiated private debt earlier this year of $100 billion which reduced the amount owed by 75% according to ABC News.