Argentina’s Ministry of Economy announced on Sunday that it will purchase over $1.5 billion from the central bank to cover interest payments on its “Globales” and “Bonares” bonds due in January 2025. The funds will come from the country’s financial surplus accumulated in the first half of the year, which reached 2.3 trillion Argentine pesos ($2.5 billion) by May. The $1.528 billion will be deposited into a dedicated account at Bank of New York, available solely for bond interest payments.
This decision comes after libertarian President Javier Milei outlined a plan to stop expanding the monetary base to fight inflation, which is currently nearing 300% annually. Since taking office, Milei has implemented austerity measures, including cutting state spending and pledging to rebuild Argentina’s depleted foreign exchange reserves.
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The central bank has been aggressively buying dollars in recent months, crucial for replenishing reserves and enabling the government to ease currency controls that hinder businesses and trade. This reserve accumulation is seen as key to restoring economic and financial stability, critical for the government’s commitment to undoing restrictive currency controls.
This bond payment signals Argentina’s commitment to its debt obligations and strengthens its financial stability. The central bank’s dollar buying spree is vital for regaining economic and financial stability and paving the way for looser currency controls. Ultimately, these actions aim to rebuild Argentina’s economic foundation and create a more sustainable future.