Argentina announces the surprise repurchase of external debt for 1,000 million dollars

The Government tries to control the economic crisis that affects a parallel currency market.

The Minister of Economy of Argentina, Sergio Massa, announced that the country will repurchase more than 1,000 million dollars of foreign debt, in order to reduce country risk in the midst of the economic reorganization process that has been taking place since last August, when he took office in The charge.

“For 2023, some of the projections we had have been modified, some that have to do with inclement weather, but also some that have to do with growth in the value of imported products. In this sense, the fiscal order is closely associated with the administration of liabilities,” explained the official in an unexpected recorded message and aired this wednesday morning.

“In the last stretch of 2022 we did very hard work that was accompanied by a new tender, an improvement in the maturity profile (of the debt) in pesos. In parallel, we saw a drop of 1,000 more points in country riskthat means a window of opportunity, for this reason we have made the decision to start a process of repurchasing external debt that begins today,” he said.

Massa added that the intention is to continue improving the external debt profile to further lower “country risk”, the indicator that measures the reliability and soundness of investments and financial operations.

In this way, he said, the possibility that companies and the State have to access the capital market is improved.

“It is a first step, very focused on global short-maturity (titles), we understand that this is where we have to attack for the best debt management,” he added, explaining that the Central Bank will be the entity in charge of finalizing the purchase. on behalf of the Treasury.

pressures

In a kind of management report, the minister stated that in the last five months he has worked very hard to normalize the macroeconomy without the measures affecting the growth of the Gross Domestic Product, the generation of employment and the recovery of consumption.

“At that time we set four premises: fiscal order, the accumulation of reserves, the increase in exports and development with inclusion, in this sense we bet that public and private investment helped development with inclusion, we achieved a process of accumulation of reserves with measures to promote exports and we increased and achieved in some sectors, such as the automotive and agricultural sectors, a record of exports,” he said.

Regarding the commitments with the International Monetary Fund (IMF), he recalled that the goals in fiscal matters and reserve accumulation were met.

The details of the repurchase, which were established in a resolution in the Official Gazette, imply 11 external debt bonds that are trading on the secondary market at low parities, which the Government considers to be a buying opportunity.

The announcement was made in the midst of the abrupt increase in the dollar in the illegal and parallel market, which in the South American country usually anticipates financial runs and greater pressure on the economy.

Between January 9 and 17, the so-called “blue” dollar went from 355 to 370 pesos; while the legal dollar only increased from 180 to 182 pesos.