However, Argentina's congress is still due to vote on the deal this week. To pass the deal Congress has to repeal laws brought in by the country's former president Cristina Fernandez de Kirchner which forbade paying the hedge funds. Congress has to approve the deal by April 16.
Without access to foreign investment, Argentina's once-robust economy has slowed down and international confidence in the country has been shaken. But since the election of President Mauricio Macri in November, there have been moves to reform the country's economy and return it to firmer ground.
Last October, the International Monetary Fund (IMF) forecast that the economy would shrink by 0.7 percent in 2016 and for inflation to be around 25 percent. But, there are hopes that Macri's economic policies will prompt a fractured political establishment to unite in order for the economy to recover.
"For Argentina, resolving its problems with creditors is paramount. It will help restore confidence in the country, and it should help increase inflows of investment and capital. Also, a swift and agreeable conclusion to its creditor problem could pave the way for eventual rating upgrades and the inclusion of Argentina in EM (emerging market) indices," Andres Abadia, senior economist at Pantheon Macroeconomics, said in a note last week.
"Macri won a convincing victory in the presidential election but he has a relatively weak position in the Congress, although it has improved slightly in recent weeks. One instrument that the government has working in its favor is that it is in charge of the federal funds. In theory, it might be able to use this as a tool to obtain support to reform the required laws."