Wednesday, February 8, 2023

Argentina repurchases US$1 billion of its external debt

The Argentine government announced on Wednesday the repurchase of US$1 billion of the country’s foreign debt.

The Minister of Economy, Sergio Massa, announced in a recorded message before the market opened that it was decided to “authorize or entrust the Central Bank of Argentina (BCRA) to carry out this repurchase process on behalf of the Treasury in order to continue improving Argentina’s external debt profile to continue lowering the country risk”.

Argentina, which has a country risk above 1,800 points, carried out a sovereign debt restructuring in 2020 and in 2022 refinanced a loan of more than US$44,000 million signed in 2018 with the International Monetary Fund, during the Government of Mauritius Macri (2015-2019).

Massa indicated that “this is a first step” of US$1,000 million that will be “very focused” on global bonds, “especially those with short maturities”, and mentioned those that mature in 2029 and 2030, issued under foreign law: ” We understand that this is where we have to attack for the best debt management”.

“Surely throughout the coming months, also inviting the private sector to accompany the Argentine State in this work to improve the profile, we will carry out other measures like the ones we are taking,” he added.

This strategy occurs at a time of high inflation, of 94.8% per year in 2022. Meanwhile, the Central Bank suffers from few international reserves and the Treasury has the debt market closed, for which reason the Government applies strong access restrictions to the exchange market and parallel exchange rates proliferate.

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