Last week, the country issued debt in international markets with a great reception from the investors: Demand was significantly higher than supply. The five-year bonds are issued in dollars, but are paid in pesos, which contributes to strengthening the reserves of the central bank.
The coupon offered was 29,5%, a level that, although high, is relatively favorable for the government in real terms, considering that year-on-year inflation is around 47%. Furthermore, the bonds include a two-year put option, giving investors flexibility ahead of the 2027 elections. The success of the placement reflects an improvement in the country's risk perception, driven by the economic reforms of the government of Javier Milei, focused on fiscal balance, deregulation and the lifting of exchange controls. While the recent agreement with the IMF and the sharp fall in country risk strengthen the external position of ArgentinaThe central challenge remains to sustainably accumulate reserves, without resorting to monetary issuance, in an economy still marked by years of high inflation, loss of competitiveness, and structural imbalances.
Source: CESCE
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