He said, The strategy consists of using surplus pesos from the Treasury to acquire dollars from central bank (BCRA), which will make it possible to meet debt maturities in foreign currency scheduled for July.
The message from the Minister of Economy seeks convey certainty about Argentina’s payment capacityespecially in a context where one of the largest maturities is approaching since the 2021 restructuring. With US$2 billion at stake, the willingness to meet financial obligations becomes crucial. In addition, the first capital amortization of the AL30 is anticipated, although for a relatively smaller amount.
These measures have generated a positive effect on the markets, with bonds experiencing solid gains for several consecutive days. At the same time, the country risk has decreased significantly, reaching minimums not seen since February 2021.
Caputo’s strategy
The government’s strategy includes the use of the surpluses from the recent bidding of Capitalizable Bills, as well as the liquidity accumulated in the Treasury, to support the purchase of dollars and ensure payments on bonds denominated in foreign currency. This action contributes to keeping the debt at manageable levels, although it is already at the highest levels since the 2021 restructuring.
In addition to guaranteeing financial stability, the government seeks to keep inflation under control and strengthen the Argentine peso. The accumulation of reserves by the Central Bank plays a crucial role in this process, while the absorption of pesos is carried out to avoid inflationary pressures.
Caputo sent two messages to the markets: on the one hand, ensuring compliance with upcoming debt maturities and the absence of a default on the near horizon; on the other hand, implementing measures to reduce the monetary base and strengthen the national currency.
The long-term objective is to regain access to international financial markets, which will require a more marked reduction in country risk. To do this, we will seek to bring it below 800 basis points, which would indicate greater confidence on the part of investors.
“The correct road”
Leonardo Chialvapartner Delphos Investment, assures in dialogue with Ámbito that “Argentina is managing to stabilize its economic situation and thus return to the international map” thanks to the economic program implemented by the current government.
However, he highlights that he still faces challenges and risks, such as an unstable political situation and the need to improve governance. Chialva suggests that, to further reduce the country’s risk, it is crucial that Congress approve the laws and decrees necessary to strengthen political stability and improve the perception of governability.
“Although the economic plan has been effective in avoiding total collapse, a more solid political dynamic is required to achieve these advances and reduce the country’s risk to a desired level, estimated between 800 and 1,000 points,” he concludes.
Ultimately, Caputo has reaffirmed the Argentine government’s commitment to a clear economic path, characterized by the maintenance of the fiscal surplus and control of monetary aggregates. This coherence is essential to restore market confidence and lay the foundations for a sustainable financial recovery.
Source: Ambito
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