(Bloomberg) — Argentina’s leader Alberto Fernandez faces a defining moment in his presidency Friday as the nation braces for its ninth sovereign debt default.
After five months in office grappling with recession, 50% inflation and a crash in the unofficial peso rate, Fernandez is trying to strike a deal with bondholders over the coming weeks to prevent even worse chaos.
If he succeeds, there may be light at the end of the tunnel for an economy that was in deep trouble even before the coronavirus pandemic, and an increased chance that Fernandez will solidify his power within the government coalition. If he fails, and there’s a disorderly default on $65 billion of overseas debt, it’ll be another major blow to the rapidly shrinking economy.
“A hard default would mean Argentina loses its chance at an orderly economic recovery,” said Alejandro Catterberg, director of Argentine consulting firm Poliarquia.
It’s familiar territory