Argentina has defaulted on its debt – for the second time in 13 years – after last-minute talks in New York with a group of bond-holders ended in failure.
So-called “vulture fund” investors were demanding a full pay-out of $1.3bn (£766m) on bonds they hold.
Argentina has said it cannot afford to do so, and has accused them of using its debt problems to make a big profit.
A US judge had set a deadline of 04:00 GMT on Thursday for a deal. The crisis stems from Argentina’s 2001 default.
Late on Wednesday evening, Argentina’s Economy Minister Axel Kicillof said the investors had rejected the government’s latest offer.
“Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default,” Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening.