Argentina to purchase $1.5b from central bank to pay bond interest due in January

Argentina’s economy ministry has announced its plan to acquire just over $1.5 billion from the central bank. The funds will be used to pay the total interest on the country’s “Globales” and “Bonares” bonds, which are due in January 2025.

To finance this operation, the ministry will tap into the financial surplus accumulated in the first half of the year, amounting to 2.3 trillion Argentine pesos ($2.5 billion) as of May. This surplus will be deposited in an account at the trustee Bank of New York, solely designated for paying the interest on the bonds.

This announcement follows the recent proposal by President Javier Milei’s government to halt the expansion of the monetary base. With annual inflation nearing 300%, Milei, a free-market economist, is implementing austerity measures and prioritizing the replenishment of Argentina’s foreign exchange reserves.

During the initial months of Milei’s administration, the central bank aggressively purchased dollars to meet its creditor obligations. Accumulating reserves is a crucial step in restoring economic and financial stability after years of crisis. Additionally, it plays a vital role in the government’s commitment to easing currency controls that impede business and trade.

Please note that the exchange rate is $1 = 919.0000 Argentine pesos.