Argentina has defaulted on its World Bank loans as talks to restart International Monetary Fund aid stalled over concerns Buenos Aires cannot deliver on its promises.
Argentine economy minister Mr Roberto Lavagna, who is in Washington, delivered the bad news to the World Bank that the nation will not pay an $805 million payment that was due on yesterday, making only a token payment of $79.2 million in interest.
Mr Lavagna had led a delegation to the IMF in Washington this week to try and avoid the World Bank default.
Paying only the interest on the loan is not enough to avoid Argentina entering default - a move that relegates it to a club of debtors that includes Iraq and Zimbabwe.
The World Bank said in a statement it cannot now consider any new loans for Argentina and that further payments under existing loans will be cut off in mid-December unless Buenos Aires makes payments that are overdue.
The move will effectively cut off one of Argentina's last sources of financing after its earlier defaulting on $95 billion of its $115 billion commercial debts.