Argentina’s economy ministry announced on Sunday its decision to acquire over $1.5 billion from the central bank to cover the interest payments on the country’s “Globales” and “Bonares” bonds, which are due in January 2025.
The ministry revealed that this transaction will utilize part of the financial surplus accrued during the first half of the year. By May, this surplus had reached 2.3 trillion Argentine pesos ($2.5 billion). The ministry confirmed that $1.528 billion will be deposited into an account at the trustee Bank of New York, earmarked exclusively for bond interest payments.
This announcement followed a day after President Javier Milei’s administration disclosed a plan to halt the expansion of the monetary base to tackle the country’s soaring annual inflation rate, which is nearing 300%.
Since assuming office, President Milei, a staunch free-market economist, has implemented stringent austerity measures. These include significant reductions in state spending and commitments to replenish the country’s depleted foreign exchange reserves.
During the initial months of Milei’s tenure, the central bank aggressively purchased dollars to meet creditor obligations. The accumulation of reserves is crucial for restoring economic and financial stability after prolonged periods of crisis. This strategy is also vital for the government to fulfill its promise to dismantle restrictive currency controls that have hindered business and trade activities.
