Buenos Aires Times

economy securities worth US$26.84 billion

Relief: Central Bank refinances expiring Lebacs, dollar drops below 25 pesos

The bank’s strategy has calmed nerves about Argentina's short-term economic scenario after weeks of market volatility.

Wednesday 16 May, 2018
Argentina Finance Minister Nicolás Dujovne, flanked by Argentina Central Bank President Federico Sturzenegger, speaks at the start of a G20 meeting of finance and banking leaders in Buenos Aires on Monday
Argentina Finance Minister Nicolás Dujovne, flanked by Argentina Central Bank President Federico Sturzenegger, speaks at the start of a G20 meeting of finance and banking leaders in Buenos Aires on Monday Foto:G20 Argentina

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Argentina’s Central Bank refinanced US$26.84 billion worth of short-term Lebac notes on Tuesday and auctioned new debt to the tune of US$200 million.

The bank’s strategy has calmed nerves about Argentina's short-term economic scenario after weeks of market volatility.

The peso suffered a 7.5-percent single-day plummet on Tuesday but rebounded to end the day at 24.67 against the dollar, as the Bank sold an additional US$ 791 million in reserves. It was the first time in 16 days that the peso has strengthened against the greenback.

The entity led by Federico Sturzenegger confirmed in a statement that it had refinanced all expiring peso-denominated securities with interest rates ranging from 40 percent for the 36-day Lebac to 38 percent for the 154-day note.

The government is currently negotiating a line of financing with the International Monetary Fund (IMF). Informal talks begin on Friday in Washington.

Observers believe Argentina will seek around US$30 billion. However, with its status as an emerging market in doubt, the country might expect much less and strict austerity conditions.

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