Luis Caputo says Argentina has cheaper funding options than bond sale

Argentina’s economy chief told investors in Washington that President Javier Milei’s government won’t need to tap global capital markets this year as it lines up cheaper financing options.

Speaking at an event organised by JPMorgan Chase & Co on the sidelines of the International Monetary Fund’s Spring Meetings, Economy Minister Luis Caputo said he expects to announce alternative funding sources very soon that will cover Argentina’s financing needs for the year, according to people present.

It would be irresponsible for the government to issue debt in international markets at current yields when it can access cheaper funding, Caputo said according to the people, without providing details on the alternatives under consideration.

Argentina may not need to return to global markets for the next year and a half, Caputo said, according to the participants, who asked not to be identified because the meeting was private. That suggests Milei may avoid selling bonds abroad until near the end of his term.

Caputo’s remarks came after Argentina reached a staff-level agreement with the IMF on the latest review of its US$20-billion programme. The country also has access to an additional US$20 billion through a swap line with the US Treasury.

In a statement on Wednesday, the IMF said the review will not be submitted to its board until the government implements “corrective measures to address earlier setbacks,” without providing further details. Caputo did not elaborate on any new measures during the private meeting.

Milei and Caputo have said they want Argentina’s sovereign risk – the premium investors demand to hold the nation’s bonds over benchmark US Treasuries – to fall to around 250 basis points, roughly half its current level, before returning to global markets.

Since the programme began in April, the IMF and investors have focused on Argentina’s ability to build foreign reserves needed to repay bondholders. Through December, the country faces about US$15 billion in debt service, including US$4.2 billion on global bonds due in July. Between 2027 and 2030, annual payments rise to an average of US$27.7 billion, according to a recent JPMorgan note.

Milei’s decision to hold off on returning to markets has already prompted one resignation. Alejandro Lew stepped down as finance secretary in February after clashing over plans to raise funds in international markets.