Argentina announced that it will make more than $3 billion in payments on loans due this year to international financial institutions, including the World Bank and the Inter-American Development Bank.

The move comes even as the government stands in technical default on other debt over its refusal to pay $1.3 billion to settle a dispute with hedge funds holding Argentine bonds from an earlier default in 2001.

A US judge, who ruled in favor of the hedge funds, has blocked Buenos Aires' payment of $539 million to creditors who accepted a 70 percent write-down on previously defaulted bonds, until Argentina also pays the hedge funds which have held out for full payment.

Jorge Capitanich, Argentina's presidential chief of staff, said $3 billion is being drawn from the central bank's reserves to make payments due the international financial institutions.

Argentina's reserves currently stand at about $29 billion, about half what they were in 2011.

Analysts attribute the decline to capital flight in the face of an unstable peso and annual inflation of more than 30 percent.