In 2018, the Argentinean government brokered an agreement with the IMF that would release funds to the country but would also require Argentina to work toward restoring public debt sustainability.

(Xinhua) — Argentinean President Alberto Fernandez said on Saturday that negotiations with private creditors to restructure part of the country’s foreign debt are ongoing, and the goal of his administration is to avoid defaulting.

According to official schedule, creditors were supposed to rule Friday on the government’s restructuring proposal, which includes 5.4 percent cut to the principal payment and 62 percent interest reduction, plus a three-year grace period. The amount to be restructured stands around 68 billion U.S. dollars.

“Objectively, creditors are not losing,” Fernandez said in defense of Argentina’s proposal. “They only earn less in a world that has been turned upside down” due to the novel coronavirus pandemic.

The new proposed rate of interest would drop from 7 percent to about 2 percent, and the president said Argentina is offering to pay 2 percent interest “in a world that pays zero.”

“The capital owed to them is practically intact,” said Fernandez. “Only 5 percent is affected.”

“We have a sort of endorsement from the main auditor of international finance, which is the (International) Monetary Fund (IMF) and the truth is that our proposal keeps 100 percent the sustainability criteria that the Fund has proposed. I hope that this time, (the creditors) understand and accompany us,” he said.

In 2018, the Argentinean government brokered an agreement with the IMF that would release funds to the country but would also require Argentina to work toward restoring public debt sustainability.

According to local analysts, though negotiations continue, the Argentinean government has to announce an agreement until May 22, as the grace period for resolving a pending 500-million-U.S.-dollar interest payment will end that day.