Argentina

Argentina's Congress on Thursday passed a new bill designed to enable the government to resume debt payments to bondholders in defiance of a U.S. court ruling which tipped the country back into default, Reuters reported. President Cristina Fernandez's leftist government is in a race against the clock to make a $200 million coupon payment due on Sept. 30 to prevent the default spreading across bond series, which could raise the risk of investors calling for immediate payment on the principal value of their bonds. But she needs to route the funds through channels beyond the reach of the U.S.

Argentina is tightening its grip on the country’s currency market as international reserves decline following its second debt default in 13 years, Bloomberg News reported. Argentine banks must now seek government authorization for dollar purchases of $150,000 or more, down from a previous threshold of $300,000, according to three bank officials with direct knowledge of the matter. Central bank officials communicated the measure through telephone calls and instant messages to currency traders yesterday, two of the people said.

In the aftermath of the country’s default, Argentine president Cristina Fernández’s approval ratings jumped as she defiantly stood up to Argentina’s “holdout” creditors, who rejected debt restructurings accepted by 93 per cent of bondholders after the country’s previous default in 2001 and then won a US court order to be paid in full, the Financial Times reported.

Domingo Cavallo, the architect of Argentina’s first debt restructuring deal in 2001, has a solution for the country’s worsening debt drama: pay the holdouts, the International New York Times DealBook blog reported. “Argentina should comply with Judge Griesa’s decision,” Mr. Cavallo said on Wednesday at a conference to commemorate the 70th anniversary of the Bretton Woods system of global financial cooperation. Mr. Cavallo, who is also credited for slaying hyperinflation in Argentina in the early 1990s, was referring to the recent court decision by Judge Thomas P.

President Cristina Fernandez de Kirchner’s government faces a second national strike in less than five months, as a default last month threatens to aggravate quickening inflation and a plunging peso, Bloomberg News reported. Some state employees picketed at the main entrances to Buenos Aires from midday today and marched down 9 de Julio avenue in the city center. Truckers, train drivers, port workers and waiters are set to join them from midnight in a 24-hour strike in demand of higher wages and in protest at dismissals.

Argentina retaliated against Bank of New York Mellon on Monday for refusing to make payments to bondholders in compliance with a US court ruling – a move which has also led a group of hedge funds that includes George Soros’ Quantum Partners to sue the US bank, the Financial Times reported. The move by Buenos Aires, which cancels the banking licences of two local bank officials, follows a proposal sent to congress last week by President Cristina Fernández that aims to replace BNY Mellon as its trustee with a local state-run bank.

Argentina's default three weeks ago, and the ongoing legal battle that led up to it, raises practical, theoretical, and moral questions about the ad hoc process that ensues when a country doesn't repay its creditors, Foreign Policy reported. "We're at a moment where a lot of people have been stopped short and are asking: Is this really the way we want restructurings to go forward?" asked Mark Weidemaier, a sovereign-bond expert at the University of North Carolina at Chapel Hill.

When President Cristina Fernández confidently praised Argentina’s financial system as “one of the most solid in the world” during a speech at the Buenos Aires stock exchange on Wednesday, some of the high-ranking executives present struggled to hide their incredulity, the Financial Times reported. Just the day before, at one point on the verge of tears, Argentina’s mercurial leader had nervously announced a plan to dodge a US court order to pay so-called “holdout” creditors in New York, after the ruling pushed the country into default last month for the second time in 13 years.

A federal court judge said on Thursday that Argentina’s attempt to skirt one of his rulings was “lawless” but stopped short of finding the country in contempt of court, the International New York Times reported. Exasperated lawyers for a group of New York hedge funds that are seeking more than $1.5 billion in bond payments that Argentina has refused to pay pleaded with the judge to take a harsher stance. In a heated moment, one of the lawyers, Robert A.

Argentina's unemployment rate rose to 7.5% in the second quarter as the country's recession appeared to worsen and more companies laid off workers, The Wall Street Journal reported. The jobless rate, published by the government on Tuesday, is up from 7.1% in the first quarter and 7.2% a year earlier. Economists expect the unemployment rate to rise further this year as the recession worsens and more people find it harder to find jobs.