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ECONOMY | 11-03-2024 11:46

Argentina seeks breathing room with peso swap worth US$65 billion

Government starting a record swap of peso-denominated debt Monday in a bid to roll over almost all of its 2024 maturities into the next four years.

Argentina is starting a record swap of peso-denominated debt Monday in a bid to roll over almost all of its 2024 maturities into the next four years, providing a temporary respite to President Javier Milei’s government.

The Economy Ministry published late Friday a list with the bonds it seeks to repurchase and sell, saying it will receive offers from investors until Tuesday 3pm in Buenos Aires (2pm ET). The swap may amount to 55 trillion pesos (US$65 billion), according to Juan Manuel Truffa, partner and director at local consulting firm Outlier.

Conversations between Economy Minister Luis Caputo and local banks began in January as his team floated the idea of rolling over all of the peso debt due this year, which amounts to 57 trillion pesos. While debt swaps are common in Argentina, the record size of this operation will be seen as a test of local market confidence in Milei’s economic programme, three months into his presidency.

Extending local debt maturities would reduce the need to print pesos to cover all of Argentina’s local debt payments in 2024, helping to stabilise the currency and potentially stamping out some inflationary pressures.

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by Patrick Gillespie, Bloomberg

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