Argentina

Argentina’s plan to repurchase $1 billion of overseas bonds meets the definition for a default, according to Moody’s Investors Service, Bloomberg News reported. The credit assessor sees the nation’s strategy of buying back short-dated dollar bonds — primarily those due in 2029 and 2030 — through direct market purchases as tantamount to a “distressed exchange and hence a default under our definition,” Moody’s analysts including Jaime Reusche wrote in a note. Moody’s still scores Argentina at Ca, the second-lowest rating. It has a stable outlook on the nation.

Brazil and Argentina will sign a bilateral agreement creating a guarantee fund to stimulate Brazilian exports, a Brazilian government source said on Monday, as officials from both governments meet for a summit in Buenos Aires, Reuters reported.

Argentina and Brazil are in the preliminary stages of renewing discussions on forming a common currency for financial and commercial transactions, reviving an often-discussed plan that would face numerous political and economic hurdles, Bloomberg News reported. South America’s two largest economies have considered options to coordinate their currencies for decades, often to counter the influence of the dollar in the region. The persistent macroeconomic imbalances of both countries, together with recurrent political obstacles to the idea, has resulted in little practical progress.

Argentina’s plan to repurchase $1 billion of its deeply distressed dollar bonds has emerging-market investors scratching their heads, according to a Bloomberg News commentary. Economy Minister Sergio Massa announced the plan Wednesday to buy back securities maturing in 2029 and 2030 trading at 30-some cents on the dollar. The notes jumped to their highest prices in more than a year after Massa spoke, extending a rally that had already produced 60% returns for investors since October.

Argentina’s international bonds leaped to their highest in more than a year after the government said it planned to repurchase about $1 billion of the debt, surprising investors in the cash-strapped country, Bloomberg News reported. The South American nation’s $16.1 billion in overseas bonds due 2030 rose as much as 3.2 cents to more than 36 cents on the dollar, the highest since October 2021, before paring gains. It is those bonds, plus ones maturing in 2029, that the government plans to buy back, Economy Minister Sergio Massa said Wednesday, without giving details.

Argentina and China have formalized the expansion of a currency swap deal, allowing the South American country to increase its depleted foreign currency reserves, the Argentine central bank said on Sunday, Reuters reported. Argentina's government needs to rebuild reserves to cover trade costs and future debt repayments, and more reserves are a key objective of a major debt deal with the International Monetary Fund (IMF). President Alberto Fernandez announced the deal in November last year and said at the time it was worth $5 billion.

Argentina's government will raise the floor for income taxes in January, the country's Economy Minister Sergio Massa said on Thursday, amid union demands to ease the burden on workers, Reuters reported. "With this tax relief, in 2023, no worker who earns less than 404,062 pesos (about $2,378 monthly) will pay the tax," Massa said in a tweet. The minister did not disclose the fiscal cost of the decision, which he said is set to benefit some 312,864 workers. The previous floor stood at 330,000 pesos ($1,942.32).

Argentina’s central bank expects to keep its key interest rate unchanged at 75% until at least early next year as internal indicators show that monthly inflation is cooling, Bloomberg News reported. The central bank board is seeing slower monthly price gains in November and is preparing to hold its key rate if that forecast is confirmed, said the people, who asked not to be named because the discussions are private. The estimates the central bank tracks suggest monthly inflation could slow to about 5.5% in November, down from 6.3% in October.

Argentina's newly struck deal with the Paris Club lenders will bring some $248 million in debt relief for the embattled South American nation and push repayments back as far as 2028, according to a document shared with Reuters by officials. The country's government said earlier on Friday it had reached a deal to restructure the nearly $2 billion it owes the Paris Club of creditors, which counts the United States, Japan and Germany among its members. Repayments would start in December this year and continue until late 2028, the document showed.