Argentina's monthly inflation rate likely soared to 28% in December, which would be the highest since early 1990, driven by a sharp devaluation of the peso currency last month by the new government of libertarian President Javier Milei, Reuters reported. The median forecast from 20 local and foreign analysts polled by Reuters underscores the challenge facing the South American grains giant, with annual inflation set to top 200% for the year, one of the highest rates in the world.
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Argentina is set to make a near $1 billion payment to foreign bondholders this week while the government of President Javier Milei continues talks with the International Monetary Fund as he seeks to restore investor confidence in the serial-defaulting nation, Bloomberg News reported. Interest on several hard-currency bonds comes due Tuesday, marking a major test for Milei just a month after he took office promising to overhaul South America’s second-largest economy.
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Argentine President Javier Milei is proposing a local debt swap that could top $71 billion, aiming to stabilize the country’s finances by pushing off maturities and reducing the deficit to zero, Bloomberg News reported. Economy Minister Luis Caputo and Finance Secretary Pablo Quirno told representatives of local and foreign banks operating in Argentina that they plan to issue new peso bonds in February to swap for the 2024 maturities, according to four people with direct knowledge of the meeting that took place Thursday afternoon.
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Argentina's inflation likely hovered around 30% in December, presidential spokesman Manuel Adorni said on Wednesday, when asked by a reporter about studies showing monthly inflation reaching nearly that level, Reuters reported. "We still don't have the official data, but we understand that the figure was around the one you are referring to," Adorni told the reporter during a press conference. If confirmed, that would take annual inflation in the South American country to over 200% in 2023, the highest in more than three decades. The official figure will only be released on Jan.
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International Monetary Fund officials are expected in Argentina this week to start negotiating with the new government of President Javier Milei on a $44 billion program that went off track during the previous administration, Bloomberg News reported. The delegation will arrive in Buenos Aires on Thursday, presidential spokesman Manuel Adorni said during his morning news conference Tuesday, without detailing who’s coming nor how long they’re expected to stay. Milei’s cabinet chief Nicolas Posse and Economy Minister Luis Caputo will lead talks with IMF staff, according to Adorni.
Argentina’s President Javier Milei is considering issuing a perpetual bond to pay a $16 billion lawsuit award stemming from the nationalization of state-run energy company YPF, Bloomberg News reported. Swinging between political jabs and policy intentions, Milei suggested that the government would issue the bond without a fixed maturity while charging Argentines the “Kicillof tax,” named after Buenos Aires Governor Axel Kicillof who spearheaded efforts to nationalize YPF in 2012.
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Argentina’s central bank changed its benchmark tool for monetary policy Monday, replacing four-week notes with one-day transactions in a bid to lower borrowing costs, Bloomberg News reported. The monetary authority will no longer auction its 28-day Leliq notes, which until now were used to determine its policy rate. Instead, the 1-day repo notes that currently pay an interest rate of 100% will serve as the bank’s new policy benchmark. Monday’s move aims to free up pesos for Argentine banks and strengthen demand for treasury notes.
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Argentina’s radical, anarcho-capitalist President Javier Milei may turn out to be pretty conventional. That comes with good and bad news for investors, the Wall Street Journal reported. Late on Tuesday, the country’s new government announced its first set of economic measures since Milei was sworn in. Economy Minister Luis Caputo said the peso’s official exchange rate against the U.S. dollar would be roughly halved and that public spending would be drastically reduced by cutting energy and transportation subsidies, canceling public works and reducing transfers to provinces.
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Argentina's economy has many problems, and dealing with a mountain of debt repayments over the next two years could determine whether the new government's economic road map succeeds, Reuters reported. The country's total sovereign debt exceeds $400 billion, some $110 billion of which is owed to the International Monetary Fund and to holders of restructured, privately-held eurobonds. With central bank reserves in the red by more than $10 billion and little chance of tapping the market, the country has some $16 billion in debt payments coming due next year.
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Argentina's new government will lay out its economic "shock" therapy plans on Tuesday afternoon in a bid to rein in triple-digit inflation and rebuild depleted foreign currency reserves, with markets and ordinary Argentines on tenterhooks about the impact, Reuters reported. Economy Minister Luis Caputo will announce the measures after markets close around 5 p.m. (2000 GMT), the spokesman for libertarian President Javier Milei, who took office on Sunday, told a news conference.
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