Argentina’s government has paid $4.3bn to holders of its sovereign bonds, its largest repayment since a 2020 debt restructuring, in a crucial step for libertarian President Javier Milei’s bid to restore confidence in the serial defaulter.

The payment, confirmed by finance secretary Pablo Quirno on Thursday, included $3.7bn to private bondholders, with the rest going to public bodies that hold Argentine debt. The government bought the dollars to make the payment using the fiscal surplus it eked out last year via a severe austerity package.

The payment is a landmark for Milei’s government after many investors doubted when he was elected in late 2023 that Argentina would escape another debt restructuring this year given the size of debts coming due in 2025. The notoriously unstable economy has defaulted on or restructured its sovereign debts three times this century.