Central Bank optimistic over post-bond swap future

Central Bank Governor Miguel Ángel Pesce said Tuesday that the closure of the debt swap would relieve pressures on exchange markets and improve economic expectations.

"We believe that we will gain calm with the bond swap and that the productive sector will have better access to exchange markets to satisfy its needs," affirmed Pesce in a communiqué.

On the day the official exchange rate was 77.97 pesos per dollar but up to 137 pesos on parallel markets, a gap which has grown in recent weeks.

"We are convinced that closing the swap in coming days will be a positive signal for the market and will reduce the [exchange rate] gap, he affirmed.

Friday was the deadline for adhering to the offer agreed with creditors to swap the bonds issued under foreign jurisdiction for debt to the tune of US$66.137 billion.

"We’re hoping for an improvement in expectations. If that happens, there would be no motive to establish new restrictions" in exchange markets, said Pesce.

In Argentina monthly foreign exchange purchases have been limited to US$200 as imposed by the Mauricio Macri administration (2015-2019) to staunch the flight of hard currency.

Pesce specified that Argentina’s reserves are "above US$43 billion."

"We can administer the exchange market with that level of reserves. We’ve done so successfully until now and we’ll be able to do so in future," he assured.

In the last week the Central Bank stiffened its controls governing dollar purchases to prevent manoeuvres to dodge the monthly cap, disqualifying over 4,000 savers who acquired dollars and passed them onto other accounts without being able to justify the operation.

– TIMES/AFP