Graphic shows timeline of Argentina’s debt crises since 2001.


Argentina’s debt crises timeline

By Duncan Mil

May 21, 2020 - The people of Argentina remember all too well the 2001-02 sovereign debt crisis that wiped out savings overnight and caused soaring unemployment. The crisis triggered a deep recession in which four presidents lost their jobs in just ten days.

Now, almost two decades later, a deadline to pay a $503 million bond payment looms as the government disputes with creditors over the restructuring of its $65 billion of sovereign debt.

The country has been in recession since a 2018 currency crisis which saw the peso loses 50 per cent of its value against the U.S. dollar. That led to a $57.4 billion bailout -- the biggest bailout in IMF’s history.

Gross domestic product shrank by 15 per cent in April from a year earlier. Economists fear Argentina is facing default as it negotiates with its creditors.

The official exchange rate is now at about 68 pesos to the U.S. dollar. In comparison, on the black market greenbacks fetch almost 140 pesos -- double what it was when the centre-left administration of President Alberto Fernández took office last December.

A default could bring even more pressure on the peso, with less than $10 billion of liquid reserves, the central bank would struggle to continue to support the official exchange rate.

Many Argentinians are waiting for President Fernandez’s speech on May 25, the day when the nation celebrates its independence from Spain. Fernández was cabinet chief to President Néstor Kirchner, the man who led Argentina in the wake of the 2001-02 crisis when the country defaulted on $81.3 billion of sovereign debt.

Without a debt deal, Argentina will once again face drawn-out legal battles with creditors as it did with so-called Vulture hedge funds following the 2001 default.

PUBLISHED: 21/05/2020; STORY: Graphic News; PICTURES: Associated Press
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