The Government welcomed the reaction of the markets, with a drop in country risk and a rise in bonds, attributing the result to the president’s visit. Javier Milei at the New York Stock Exchange and the meeting held by the Minister of Economy, Luis Caputo, with a hundred potential investors in Argentina, within the framework of a conclave organized by the JP Morgan Bank.
The meeting organized by JP Morgan brought together representatives of banks and mutual funds who wanted to know “first-hand” what the situation in the country is.
A meeting with answers for investors
“The meeting was very positive,” A high-ranking source from the Treasury Palace said: Scope, in front of a room that was “full”. And he added that “The minister explained President Javier Milei’s entire program, the foundations on which it was designed and the favorable results achieved.”
Caputo also “answered all the questions” The minister also knows the attendees and their concerns well, as the head of the Treasury worked for the Ministry of Finance during the 1990s. JP Morgan.
During the meeting, the head of the economic management stressed the Government’s deep conviction in defending fiscal balance at any cost. In this regard, he specified that it will be through the surplus in public accounts that the official administration will be responsible for purchasing the foreign currency needed to meet foreign debt payments.
A “market friendly” alternative
According to the guidelines of the draft budget prepared by the Executive Branch, a primary surplus of 1.5% of GDP will be recorded this year and 1.3% next year, which will be used to pay interest on the debt.
In this regard, the Government published a decree on Monday that paves the way for a possible exchange of the debt in dollars.
The DNU allows ignoring the article that establishes that any exchange must improve two of the following three conditions: amounts, terms and interest.
In this way, it makes the Executive’s negotiating capacity more flexible, which could now, for example, extend maturities in exchange for raising coupons without having to cut capital, according to a report by the Cohen Group.
And he claims that “With difficulties in accumulating net reserves and without access to external financing, the exchange is presented as a ‘market friendly’ alternative to extend maturities without investors suffering losses on their holdings.”
The official projections, which Caputo presented to investors, contemplate that, after a 3.8% drop in activity in 2024, in the coming years The Argentine economy will see high growth rates of around 5% annuallyIn parallel, inflation is expected to be reduced to 18.3% by 2025 and to less than one digit (7.4%) in 2027.
Source: Ambito
