Argentina formally defaulted on its $141 billion public debt today as new President Eduardo Duhalde swore in ministers for the grim task of preparing a currency devaluation to reverse a deepening recession.
A government source said Argentina missed payment of $28 million for an Italian lira bond due today, effectively shutting it out from the foreign credit market and signaling the biggest sovereign default in history.
Argentina had announced it was suspending payments on part of its $141 billion debt last week after bloody riots triggered by deepening austerity and poverty toppled former President Fernando de la Rua's government.
Mr Duhalde, a Peronist party kingpin who became Argentina's fifth president in two weeks on Wednesday, is due to unveil his economic rescue plan tomorrow and wants congressional approval by Monday.