Argentina debt talks deadlocked as deadline looms
The Argentine government has extended a deadline to restructure $65bn (£53bn) of debt to 22 May in an effort to avert further financial turmoil.
Argentina had asked private bondholders to simply accept drastically lower interest payments and to defer those payments until 2023.
Most bondholders rejected the offer.
The government says it cannot afford to make the payments amid the coronavirus pandemic but non-payment will make it almost impossible to get future loans.
Governments often tend to finance spending by issuing bonds - this implies they are loaned money by investors who be prepared to be paid a specific amount of interest for a number of years before they are repaid the total amount that was borrowed.
The interest governments pay depends upon how high investors think the chance is that they could neglect to make a payment (referred to as a default).
What's the context in Argentina?
By the end of 2019, Argentina had racked up $323bn of debt, the same as 88% of its gross domestic product, according to International Monetary Fund figures.
On 10 December, the centre-left politician Alberto Fernández was sworn in as Argentina's new president.
In his inaugural speech, Mr Fernández warned that while Argentina was ready to repay its debt, it needed the economy to grow before it might make the payments.
A lot of Argentina's debt is priced in US dollars and the recent slide of the worthiness of the local currency, the peso, against the dollar has made interest payments dearer.
Argentine exports currently usually do not generate enough foreign currency to repay the massive debt.
This is why the president has tried to restructure a number of the debt so as to delay payments and purchase his government time.
His government approached international creditors holding $65bn worth of bonds with an offer including a three-year grace period where Argentina would not need to pay interest, in addition to a chunky cut to Argentina's interest payments.
Although some creditors agreed that Argentina ought to be given more time to settle, many balked at the interest rate cut and no deal was reached by Friday, the deadline Argentina had set.
Some creditors also reportedly didn't just like the take-it-or-leave-it approach of the Argentine government.
Now Argentina has extended that deadline to 22 May, your day on which it really is due to repay $500m in interest.
President Fernández said he hoped the creditors would now think of a counterproposal and that both sides could still reach an agreement by that date.
