Argentina’s Ministry of Economy announced that the country achieved a historic voluntary exchange of sovereign debt in pesos for 7.4 billion pesos, equivalent to approximately 28.9 billion dollars at the current exchange rate. Adherence to this operation reached 77.8%. Gabriela Cerruti, presidential spokeswoman, highlighted in a press conference that this swap completely clears the debt in pesos for the second half of 2023.
The purpose of this financial operation was to alleviate maturities in local currency for an approximate amount of 9.5 billion pesos (US$37 million) between June and September, during a key semester due to the general elections in Argentina.
After this swap, maturities were reduced by 7.4 billion pesos, according to the Ministry of Finance in a statement. Eduardo Setti, Secretary of Finance, stated that this is the largest public debt swap operation in Argentina’s history in the domestic market, both for its economic importance in the public accounts and for covering the most significant maturities accumulated for the second half of 2023.
The successful outcome of this operation, according to Cerruti, will allow us to advance in the pending points with the International Monetary Fund (IMF) and enter a new stage before the end of the month. The IMF welcomed the Argentine authorities’ efforts to reduce the refinancing risks associated with domestic debt.
Economy Minister Sergio Massa will travel to Washington after June 20 to seek to renegotiate the agreement to refinance a $44 billion debt contracted in 2018. Argentina expects the IMF to bring forward the planned disbursements until the end of the year, representing almost $20 billion, to offset the impact of a historic drought on the economy and a cumulative inflation rate of more than 100% year-on-year.
This is the third debt swap carried out by the Argentine government this year, after one for 3 billion pesos in January and another for 4.3 billion pesos in March. 44 percent of the peso debt is held by private banks and funds, while the rest is distributed among state-owned companies, government agencies, and individual holders.