Argentina secures US$3-billion loan from private banks

Argentina on Wednesday finalised a US$3-billion loan with six international banks, securing a deal that bolsters the country’s international reserves ahead of debt maturities due next Friday.

The operation, a so-called “passive repo,” is a short-term loan backed by sovereign bonds as collateral, Argentina’s Central Bank said in a statement.

Argentina will pay an annual interest rate equivalent to 7.4 percent, with a maturity of 372 days, said the monetary authority known as BCRA.

The BCRA received bids totalling US$4.4 billion, but decided not to increase the size of the financing.

The deal comes just days before the country faces foreign-currency debt repayments of more than US$4 billion, according to financial media outlet Ámbito.

Argentina has scant international reserves, a situation President Javier Milei’s government is seeking to ease through foreign-currency purchases by the Treasury and the Central Bank. 

Recently passed legislation encourages the declaration of undeclared savings by raising the minimum thresholds for launching tax evasion investigations.

Argentina has US$44.187 billion in gross reserves, according to the latest available data.

The country has entered default on several occasions, twice this century: in 2001, amid a social upheaval that left 39 people dead, and again in 2020 during the Covid-19 pandemic.

– TIMES/AFP