MercoPress. South Atlantic News Agency

IMF lets Argentina defer $1.1 billion in debt.

The International Monetary Fund on Friday granted an Argentine government request to defer $1.1 billion in debt repayments that Buenos Aires was scheduled to make between now and January.

Argentina will have to make those payments one year after their original due date, according to an IMF communique.

The Fund said its "policy on repayment expectations allow for such extension where the member's external position is not sufficiently strong for it to repay early without undue hardship or risk." "Because a decision to approve an extension of repayment expectations is a technical one, it is not based on an assessment of the authorities' economic program," the statement said, noting that Argentina will still face obligations to the Fund of roughly $1.46 billion over the next four months.

In its statement, the IMF said Argentine President Nestor Kirchner's government has committed itself to making those payments. Thanks to the IMF's extension, Argentina will not have to pay $290 million that would have become due on Monday. The other deferred payments had been scheduled for Oct. 15, Nov. 22, Dec. 9 and 20, and Jan. 17. Although the statement explained that the IMF did not base its decision on an analysis of the country's economic performance, it did mention government policies.

"During the meeting, Argentina was urged to decisively address all the outstanding structural issues in their program, and to complete a comprehensive and sustainable debt restructuring.

Contacts between the IMF and the authorities on the policy framework going forward will continue," the statement concluded.

The Fund is currently withholding from Argentina a loan of $719 million, citing Buenos Aires' failure to reach an accord with private creditors and its reluctance to move ahead on IMF-recommended changes to tax, banking and energy policy.