19 June 2014
Last updated at 22:33
Jorge Capitanich has defended his country’s stance against what he calls the “vulture funds”
Argentina’s stock market closed 4.9% lower on Thursday after the country’s cabinet chief said there would be no delegation to the US to negotiate with bondholders over a $1.3bn (£766m) debt.
Earlier this week, a US Supreme Court ruling sided with bondholders demanding Argentina pay them the amount in full.
Argentina defaulted on debts in 2001 following a severe economic crisis.
It has been in a legal battle with a number of US hedge funds which lent money to the country.
Many hedge funds have agreed to accept a partial repayment, but others, led by NML and Aurelius Capital Management, are demanding payment in full.
Earlier this week, President Cristina Fernandez de Kirchner went on national television to say her country could not afford to honour the Supreme Court’s ruling, but said her government was willing to discuss the issue further.
However, Chief of the Cabinet of Ministers Jorge Capitanich said on Thursday there were no plans to negotiate with the hedge funds directly in New York.
“There’s no Argentine mission or committee going to New York,” he said.
Argentina argues that the hedge funds bought most of the debt at a big discount after the 2001 default, and have since tried to impede the country’s efforts to restructure.
Investors holding more than 92% of the defaulted debt agreed in 2005 and 2010 to write off two-thirds of their pre-crisis value, providing Argentina with time to re-build its economy.
But the hedge funds owning the remaining 8% held out against the restructuring.