This swap is part of the objective of the Minister of Economy to gain more time to make payments amid a wide sovereign debt crisis.
The government reached an agreement with local bondholders to swap nearly 200 billion pesos ($ 3.2 billion) of debt in local currency in a tender planned for Thursday.
The planned swap, which is offering new instruments that will expire between 2021 and 2024 for instruments that expire this year, is part of Argentina’s goal of saving more time to make payments amid a wide sovereign debt crisis.
“The objective is to defer a significant portion of the debt in pesos at sustainable interest rates,” Economy Minister Martín Guzmán told Reuters, adding that the Government hopes to “exchange around 200,000 million pesos in short-term debt in this first round“
Guzmán, who is also holding tough negotiations with international creditors to restructure nearly $ 70 billion in debt under foreign law, added that deferring debt payments in pesos would ease “the pressure on the Treasury’s financing needs and, under current conditions, about the central bank too. “
“A favorable result would facilitate a gradual but persistent process of accumulation of foreign reserves, which in the government’s opinion is a necessary condition to ease capital controls,” he said.
Argentina is focused on deferring its local bonds through a series of tenders to exchange debt. But at the international level of its obligations, the picture is more difficult. The nation wants to reach an agreement with external creditors by the end of March.
At the same time, Alberto Fernández’s government is in talks for a new program with the International Monetary Fund (IMF), which in 2018 approved a credit line for 57,000 million dollars to Argentina. Of that total, the country used $ 44 billion.
Guzmán said last week that Argentina needs “substantial relief” from international instrument holders in its restructuring process, a sign of firmness to creditors.
However, these negotiations could suffer some delays due to the effects of the coronavirus, whose cases are growing in Latin America and have forced Argentina to impose strict quarantine measures and close its borders.
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