For 15 years, Argentina has been in the dark side of the global money market scene. In addition, it has been in a battle with a number of international hedge funds. Now, Argentina is about to initiate a bond in the amount of $12 billion or more to settle the debt with its holdout creditors and end the country’s massive default. The Senate of Argentina recently voted 54-16 in favor of the deal to enable the country’s re-entrance into the international capital market and boost its economic growth.
According to Goldman Sachs’ head of Latin American economics, Alberto Ramos, the decision made by the senate moved them one step closer to prevail over the default and close the long chapter of being financially isolated from the international market scene.
President Mauricio Macri was also able to gain support from a number of politicians from the bloc of former President Cristina Kirchner, leftist Front for Victory. These politicians chose to support President Macri to revitalize the country’s dilapidated economy.
During the reign of Kirchner, Argentina was barred from the capital markets on account of the fact that the country was being sued by hedge funds. The former President was adamant not to pay these creditors, whom she often referred to as “vulture funds”.
For more than a decade, Argentina was plagued by high inflation, low investments, failing infrastructure and a low supply of hard currency. The Senate vote was the final obstacle that President Macri had to face before Argentina can turn over a new leaf. The current President has quickly made several significant changes, including meeting with President Barack Obama to dissolve the tension that was accumulated during the Presidency of the Kirchners.