Argentina sues Citibank over recent agreement with holdout creditors in the US

Associated Press

The Argentine government says it's suing Citibank over a recent agreement related to the South American country's long-standing debt.

Economy Minister Axel Kicillof told reporters on Wednesday that the government sought to nullify in Argentine courts Citibank's recent agreement with a group of holdout funds in the United States.

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It's the latest development in a long legal fight between Argentina and creditors that refused to accept debt swaps in 2005 and 2010. U.S. district judge Thomas Griesa in New York has ruled that Argentina can't pay the restructured debt without paying the holdout creditors.

Citibank had been processing payments for the restructured debt. Last month, Griesa ruled Citibank would be in contempt if it continued to make the payments, prompting the bank to reach an agreement to exit the business.