Argentina’s government struck a $65bn deal with private creditors in late August to restructure the country’s sovereign debt following months of acrimonious wrangling. The debt exchange, enabling creditors to swap old bonds for new ones, extended maturities on the debt and lowered interest rate payments from an average of 7% to about 3%.
The negotiations took place against the fallout from the Covid-19 pandemic which has hammered the country’s economy, shrinking gross domestic product by 12.9% in the first half of the year compared with the same period in 2019. The return to power of a Peronist government in October last year led by president Alberto Fernández resulted in the country’s ninth sovereign debt default and led to widespread fears of a messy and protracted fallout.
