Managing Director Christine Lagarde had been expected to recommend the IMF executive board file a brief with the U.S. Supreme Court. That brief would have supported Argentina's petition to reverse lower court rulings seeking to force Argentina to pay more than $1.4 billion owed to investment funds trying to collect on bonds rendered nearly worthless in the default.
The IMF is concerned the case will set a precedent that could make it harder for other countries to obtain debt relief. The IMF says Lagarde reversed her decision after the U.S. said it would not support the filing.