Caputo: Argentina negotiating loan of up to US$7 billion with banks

Argentina is negotiating with banks for a loan of up to US$7 billion, Economy Minister Luis Caputo said Wednesday, amid dwindling international reserves and debt maturing in January.

Speaking at an event attended by leading business figures, the official spoke of negotiations for between US$6 billion and US$7 billion with various private institutions.

"The banks have offered us US$6 billion, US$7 billion... and we are seeing how much we will accept. Whether it's zero, US$1 billion, US$2 billion, US$3 billion, US$4 billion, we'll see," Caputo said at a forum in Buenos Aires, which was also streamed on YouTube.

"We want to ensure that the January coupon payments don't lower the level of reserves," Caputo said. 

According to local press reports, the debt maturities are estimated to be around US$4.2 billion.

Argentina took on a new US$20-billion programme with the International Monetary Fund in April. 

The Washington-based lender has asked the government for "additional efforts" in accumulating international reserves, which as of December 3 stood at US$41.9 billion, according to Argentina’s Central Bank.

Caputo denied that Argentina was negotiating a US$20-billion loan with private banks and the amount had later been reduced to US$5 billion.

"There is no possibility that banks will lend Argentina US$20 billion. It was a lie," he said.

In October, US Treasury Secretary Scott Bessent had mooted the idea of a $20-billion loan after the two countries signed a separate US financing agreement for Argentina for the same amount.

"We weren't talking to banks to get a US$20-billion loan, we were talking to the United States ... and two other countries," Caputo said, clarifying that this is what Bessent had been referring to.

Caputo did not specify which other two countries he was referring to.
He went on to say that Argentina’s country risk rating, tracked by JP Morgan, would fall in the coming weeks, should a deal be made. It currently stands at 639 points at the time of writing.

Caputo’s comments brought calm to investors and sparked enthusiasm for Argentine stocks trading on the New York Stock Exchange.

Some shares posted gains of up to nine percent, reflecting the confidence.

Milei speech

Closing the summit, President Javier Milei reiterated the importance of fiscal balance and sought to draw a distinction between his government and that of former president Mauricio Macri (2015-2019).

He argued that during the Cambiemos government “fiscal adjustment did not take place – it was never corrected, only corrected through indebtedness.”

The President went on to suggest that “economists are part of the problem” facing Argentina.

Milei said his central goal is to eliminate any rise in the cost of living. “We don’t want to see any more inflation in Argentina,” he said, stressing that economic decisions are designed to consolidate that path.

He also criticised sectors of economic and political power that, in his view, resist the government’s programme, saying he has “to report to 47.5 million Argentines.”

– TIMES/AFP/NA