The Economy Ministry building is seen in Buenos Aires
The Economy Ministry building is seen in Buenos AiresReuters

The Argentine team that is slated to meet a court-appointed mediator in New York on 11 July to settle the country's disputes with the holdout funds will not include the country's economy minister Axel Kicillof.

"The delegation...will be formed by the economy ministry's judicial and financial team...but the economy minister won't be going," said Jorge Capitanich, President Cristina Kirchner's cabinet chief.

Capitanich, who did not say why the minister is not attending the meeting, noted that the parties had previously agreed to the minister's absence.

Kicillof and his team had earlier met with Daniel Pollack, the lawyer appointed by a US judge to oversee negotiations between Argentina and the hedge funds that did not take part in Argentina's massive debt restructuring and are demanding a full payout from the country.

During the meeting, Kicillof raised his government's request again, asking US District Judge Thomas Griesa to suspend his earlier ruling that bars Argentina from paying the holders of its restructured debt unless it pays the hedge funds.

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

Following the adverse order from Griesa, 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.

The government's coupon payment to restructured bondholders through a New York bank had earlier been blocked by Griesa. As a result, the country is facing a technical default by the end of July if it does not make a settlement with the so-called vulture funds.

Despite the bitter spat with them, Argentina will try to settle with the holdout funds as it has little alternatives to avoid the default, which would damage its reputation further in the international capital market.