Latin America

Why is Latin America so dependent on loans?

Argentina's recent deal with private creditors has taken it out of its ninth debt default. The cycle of constant borrowing is seen all over Latin America

Why is Latin America so dependent on loans?
Photo: Maximiliano Gagliano/Shutterstock

On August 5, after 30 hours of negotiations, the Argentinian government announced that it had come to a long-awaited agreement with its private creditors, allowing it do restructure its debt of almost USD 65 billion in foreign loans. The deal is a simple one: for every USD 100 the country owes its creditors, Buenos Aires will pay USD 54.80. 

This agreement doesn’t just allow Argentina to emerge from its “technical moratorium” status — which is how Economy Minister Martín Guzmán refers to the country’s ninth debt default in May this year — it also represents USD 30 billion in...

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