UPDATE 2-Argentina's 'unsustainable' debt should not be hard to restructure -central bank chief

(Adds Pesce’s comments, background)

BUENOS AIRES, Dec 18 (Reuters) - Argentina’s debt is “unsustainable” but should not be difficult to restructure, considering the problem lies mainly with repayment schedules and interest coupon amounts, central bank chief Miguel Angel Pesce said in an address on Wednesday.

He also called Argentine interest rates “exorbitant” and said they would “surely” go down over the short term. The central bank’s benchmark interest rate is about 63% as monetary policymakers try to ease inflation which is expected at 55% this year.

He said measures including a bill submitted by the government and dubbed the “Social Solidarity and Production Reactivation” project, needed to be passed by Congress to quell inflation and set the stage for lower interest rates.

“We are again in problem of unsustainability of our debt, but it is a problem of payment agenda and coupon value that will not be so difficult to solve,” said Pesce, who started the job last week after Argentina’s new president, moderate Peronist Alberto Fernandez, was inaugurated.

He said central bank transfers of cash reserves to Argentina’s Treasury should be as small as possible and last for the shortest possible period of time. The government needs cash to pay for an increase in welfare promised by Fernandez and renegotiate about $100 billion in sovereign bonds and loans.

A group of around 80 of Argentina’s bond holders have formally set up a creditor group ahead of debt restructuring talks expected to get underway shortly.

Reporting by Eliana Raszewski and Cassandra Garrison; Writing by Hugh Bronstein; Editing by Chizu Nomiyama, Marina Lammertyn, Diane Craft and Richard Chang