- The Washington Times - Tuesday, January 14, 2003

RIO DE JANEIRO, Brazil, Jan. 14 (UPI) — Argentina is inching closer to a new loan deal with the International Monetary Fund Tuesday, with local news reports indicating the country will make some $2.6 billion in debt payments to multilateral lenders by Friday.

Several news publications in Argentina reported that the country tapped its foreign reserves and made an $845 million payment to the Inter-American Development Bank Tuesday.

On Friday, Argentina is expected to make a $1 billion loan payment to the IMF itself, along with a payment of $805 million to the World Bank.

The country has previously missed debt payments with both the World Bank and the IADB.

According to Argentine officials quoted in the newspaper La Nacion, the payments should lead to a new, transitional IMF accord within days.

"We are looking to dodge this uncomfortable dilemma between the agreement with the IMF and the debt payments we have to make in the next days so that we don't default (with the IMF), which is truly what we don't want," Alfredo Atanasof, the chief of the president's cabinet, said Tuesday.

On Monday, Argentina agreed with the draft loan package proposal created by a visiting team from the IMF that has been in Buenos Aires since last week.

That proposal will now be looked at by IMF officials in Washington, who are scheduled to debate the country's status on Jan. 23, though a new deal may be unofficially announced before then.

The IMF said in December that it would seriously consider extending Argentina a temporary, abbreviated loan deal that would see the country through its April presidential elections and the months following.

It was in December 2001 that Argentina was cutoff from its $22 billion loan deal with the IMF.

That sparked a series of events culminating in the country's default on its debt and the rotation of four presidents through power within two weeks as protesters took to the streets.

Since his appointment, Argentine President Eduardo Duhalde has been battling to come to terms with the IMF, meeting much resistance from lawmakers and the judicial branch while trying to impose IMF-demanded reforms.

Argentine officials have been playing hardball on loan payments to multilateral lenders since October, saying they would no longer meet debt obligations unless the IMF came through with a new loan deal.

The IMF has remained unmoved, and Argentina subsequently missed payments to the World Bank and the IADB.

Argentina has a $1 billion payment due to the IMF this Friday. If no deal is reached and Argentina defaults on the IMF, the country would essentially be cutoff from foreign credit, as international banks long ago dropped the country.

International credit for the entire region has been significantly cut in the last year, largely because of the fallout from Argentina and the economic turbulence in Brazil during that country's presidential election last year.

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