Buenos Aires, Dec 9 (NA) – The financial market reacted with indifference to the debt issuance that the government of Javier Milei will carry out tomorrow, while the Country Risk remained above 600 points.
Although the signal the Ministry of Economy aims to send is that Argentina will have the funding to meet its debt payments, investors remain unsatisfied and demand more clarity on the government's exchange rate and monetary policy for the next two years.
The head of the Ministry of Finance, Luis Caputo, explained that this issuance allows the country to take dollars from the market, meaning that the next foreign currency it can purchase can be retained as reserves, as it will not be needed for debt payments.
However, the move went unnoticed by the market; foreign-law bonds traded sideways, and consequently, the Country Risk remains at 633 points. At these levels, it is impossible for the government to issue debt in the international market, as it would have to pay a dollar-denominated interest rate above 10%.
IP
The operation involves a bond under national legislation, which limits the universe of potential subscribers and is not a sustainable long-term strategy. Even market operators suspect the auction will start with a pre-agreed demand for a certain volume to ensure a good outcome.
«The official intention is to proceed with sovereign issuances under New York law in the coming months, although for this, it will first need to obtain approval from Congress. In summary, the central objective is to meet maturities without impacting reserves and, if these issuances continue, allow the BCRA to build its own reserves. This is what the market demands to ensure the country has a buffer capable of facing episodes of instability, both local and international,» said a recent report by the consulting firm Invecq, accessed by the Argentine News Agency (Agencia NA).
