The Argentine government will repurchase state bonds for some US$1,000 million, in order to improve the profile of the sovereign debt, announced the Minister of Economy, Sergio Massa.
“We saw (in 2022) a drop of 1,000 points in country risk. That means a window of opportunity. That is why we have made the decision to carry out a debt buyback process for more than US$1,000 million,” Massa said in a short video broadcast to the media.
The markets reacted positively, with increases of 11% to 12.6% in the price of global bonds, including 2029 and 2030.
Massa explained that the objective of the plan is to “continue improving the debt profile and continue lowering the country risk”, located at 1,884 basis points according to the measurement of the JP Morgan bank, a reference for investors.
An environment of uncertainty reigns in the markets due to a sustained rise in the value of the parallel dollar (illegal or ‘blue’), due to increased demand from tourists.
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“The holiday season (austral summer) is generating upward pressure. Many Argentines who decide to travel abroad are going to buy dollars at the ‘blue’ because they have very restricted access to the official exchange rate and the stock market,” said analyst Lucio Garay Méndez, from Eco Go Lucio, to the specialized portal Ámbito, mentioning three of the multiple exchange rates existing in Argentina.
The official exchange rate was located this Wednesday at 189.74 pesos per US bill (+0.12%), according to the Central Bank’s daily microdevaluation program.
After Massa’s announcement, the value of the blue dollar fell to 374 pesos (-1.06%), after eight consecutive days of increases.
Most of the securities that will be repurchased were issued in the framework of the restructuring of the debt with private creditors for US$66,000 million in 2020.
Argentina reached another debt refinancing with the International Monetary Fund (IMF) in 2022, for some US$44 billion. The Argentine economy would have grown 4% last year, according to IMF forecasts, but inflation remains out of control, with a retail level of almost 95% in 2022.