The Economy Ministry building is seen in Buenos Aire
The Economy Ministry building is seen in Buenos AireReuters

A US judge has scheduled a hearing today to consider Argentina's stance on payments to holdout creditors, as the country struggles to avoid slipping into another debt default spiral.

Earlier, the court blocked the country's attempt to pay its restructured bondholders. Argentina had deposited about $832m (£489m, €610m) at New York banks to make interest payments, which were due 30 June on its foreign-currency bonds, without paying the holdout creditors.

Agentina's Economy Minister Axel Kicillof said: "The absurd ruling...constitutes a sophisticated way to try and bring us to our knees before global usurers."

Argentina has been engaged in a long legal battle with hedge funds, Elliott Management and Aurelius Capital, which refused take part in the country's debt restructurings. About 92% of the country's creditors agreed to swap debts and accept less money.

Earlier, US District Judge Thomas Griesa ordered that Argentina must compensate the holdout creditors at the same time it pays investors, who took part in its debt restructuring.

Argentina claimed that if the country paid the suitors on their terms, it would lead to claims from other holdouts of around $15bn in debt.

Following the adverse ruling, Argentina said it was willing to negotiate with the so-called "vulture funds" to settle the 12-year-long legal dispute, and asked the court to stay its order to "allow the Republic to engage in a dialogue with the plaintiffs in a reasonable time frame."

Without the stay, Argentina would not be able to make the 30 June coupon payment on its restructured bonds. If it does not make the payment, it is likely to fall into technical default after a 30-day grace period.

The lawsuits have kept the country from accessing the international capital markets since defaulting on its debt in 2001.