AT ALBERTO FERNANDEZ'S official residence in a suburb of Buenos Aires, the mood mixed relief and caution. "We've dodged a bullet," said an adviser to Argentina's president after the government had reached a deal with creditors on August 4th. The news came just as the country recorded 166 covid-19 deaths, a daily record. "The challenge is a path out of pandemic and deep recession," said the adviser. The summing-up is accurate. Mr Fernandez, a Peronist who became president in December, had appeared to be on a collision course with holders of $65bn-worth of foreign-law bonds. That is about 40% of the government's foreign debt and equivalent to 16% of this year's GDP. The economy minister, Martin Guzman, initially demanded big cuts in interest payments and a delay until 2023 in resuming them. Argentina, now on its ninth debt default, looked set for yet another legal battle with creditors, which would have weakened the peso, quickened inflation and prolonged its exile from international credit markets.
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