Argentina secures vital deal with IMF

Argentina has clinched a new 3-year aid deal with the IMF which is seen as vital to help the country recover from its worst ever…

Argentina has clinched a new 3-year aid deal with the IMF which is seen as vital to help the country recover from its worst ever economic crisis.

The deal to refinance $21 billion worth of debt with multilateral lenders comes just a day after Argentina defaulted on a $3 billion debt to the fund and after months of tortuous negotiations.

It also paves the way for Argentina to get down to restructuring $90 billion worth of defaulted debt held by creditors from Milan to Tokyo - and repair credit lines severed after last year's record sovereign default made it a financial pariah.

The agreement did not include either a timetable for utility tariff increases or compensation for banks that lost billions of dollars due to last year's devaluation - both of which the IMF had long been demanding in return for aid.

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Argentina chose to default rather than bow to demands for budget cuts and economic reforms and shell out about a quarter of its international reserves.

It was the biggest single missed payment on record with the IMF, though many analysts had played down any immediate impact, confident an aid deal was imminent.

Argentina's economy has shown tentative signs of recovery in recent months under the stewardship of highly popular Mr Nestor Kirchner, who has argued any more austerity demanded by the IMF would push the country back into recession.