ARGENTINA yesterday launched legal action against Citibank Argentina for striking a deal with a group of US creditors fighting the government over unpaid debt.
The announcement by Axel Kicillof, the country’s economy minister marked a fresh low in deteriorating relations between it and the bank.
Citibank Argentina, a subsidiary of Citigroup, found itself at the centre of a lengthy court battle after the government demanded it process interest payments on exchanged debt, in defiance of US court orders.
The bank last month agreed with the litigating investors not to appeal against the court’s injunction blocking Argentina’s payments if it was allowed to process two one-off transfers in March and June to help it quit its local bond custody business.
But Kicillof said this “violated and interfered with regulations governing our public debt”.
A Citigroup spokesperson told City A.M.: “We are disappointed about the announced judicial actions expected to be taken by the government… Citi has acted in accordance with all applicable laws and will respond to these actions in due course.”