WASHINGTON, Jan. 29 (UPI) -- The combative posture that Argentina's leader has taken with creditor nations may cost his nation a big loan from the International Monetary Fund.
About a third of the IMF's governing board refused to support the fund's release of $350 million to Argentina of a total $13.3 billion program, the Financial Times reported Thursday.
Significantly, three members of the dominant Group of Seven rich countries were among those representatives who declined to support releasing the monies.
The sum was negotiated last September and intended to roll-over outstanding IMF loans.
The decision followed rising concern about the Argentine authorities' combative negotiations with the private bondholders who own $90 billion in defaulted sovereign debt.
The IMF's rules say it can lend to a country in default only if it is negotiating in "good faith" with its bondholders.
Argentine President Nestor Kirchner has said he has no intention of improving the initial restructuring offer, which entails a write-down of more than 90 per cent of net present value of its defaulted debt.
The Institute of International Finance recently warned the IMF that it was in danger of breaking its own rules by continuing to lend to Argentina.
