Argentina repays US$75 million

Argentina US$75 million it owed to the IMF, staving off a default to the Washington-based lender, the country's cabinet chief, Jorge Capitanich, said.

The payment to the IMF signals that Argentina isn't willing to risk being cut off from more aid by government-backed lenders, even as President Eduardo Duhalde says the country will default on most of its US$141 billion in debt. Capitanich said the government will ask for US$20 billion in aid.

The World Bank, which is owed US$2.6 billion from Argentina this year, says it also expects Argentina to keep paying as planned.

"We have no indications from them that they do not expect to honor their payments," said Christopher Neal, a bank spokesman.

The bank is owed US$40 million this month and US$101 million in February. In April and March those payments jump to more than US$800 million. Both the IMF and World Bank say they haven't started discussing policies with the new administration in Buenos Aires.

"We are open and available to meet with them, but they have not requested a meeting yet," Neal said.

The money Argentina owes the IMF, World Bank and Inter-American Development Bank represents almost a quarter of the nation's foreign debt.

Argentina drawn about US$20 billion in IMF loans in the past decade, with about half that coming in last year alone. The fund last month said it would withhold further payments because the government failed to cut its budget gap as promised. About US$6 billion of the money Argentina owes the fund is due to the lender this year, including more than US$1 billion slated for payment this month. Yet US$930 million of that repayment can be delayed for a year and accrue a higher penalty interest rate, according to the terms of the loan agreement.

In total, Argentina owes the World Bank about US$9.5 billion and the Inter-American Development Bank approximately US$7.5 billion, according to the lenders. Argentina owes the IDB US$1.5 billion this year.