Argentina reforms capital markets return

Buenos Aires (dpa) — Argentina is set to issue a four-year, dollar-denominated bond, Economy Minister Luis Caputo said on Friday, as the country looks to return to international capital markets following a nearly eight-year absence.

The bond will carry an annual interest rate of 6.5% and be sold next week, Caputo said.

The proceeds will be used to redeem debt securities maturing next year.

Argentina has been largely cut off from the global capital markets in recent years due to its high level of debt and lack of creditworthiness.

The South American country last issued dollar-denominated government bonds in January 2018. Since then, fresh money has come mainly from the International Monetary Fund (IMF), to which Argentina owes more than $40 billion.

The IMF recently demanded that its largest debtor build up more extensive dollar reserves at the central bank.

Argentina reforms capital markets return

“It is important to regain access to the markets, because when we refinance the maturing debt, the central bank can keep every dollar it buys. This ends the debate about building up reserves,” Economy Minister Caputo told the A24 channel.

Argentina’s ultra-liberal President Javier Milei has imposed a radical austerity programme on South America’s second-largest economy.

He cut subsidies on gas, electricity and public transport, laid off thousands of civil servants and put public construction projects on hold. This enabled him to balance the national budget and significantly reduce inflation.