Argentina

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.

Argentina’s next government needs to unwind currency controls and let the exchange rate trade freely, according to Buenos Aires Mayor Horacio Rodriguez Larreta, one of the main opposition leaders seen as a likely presidential contender next year, Bloomberg News reported. “You have to aim for that,” Larreta said in an interview on the sidelines of the C40 World Mayors Summit in Buenos Aires. “What you have to do and how fast depends on the situation. You’d have to see how much foreign reserves the central bank has when you take over.

Argentina's monthly inflation rate came in at 6.2% in September, the government's INDEC statistics agency said on Friday, slower than a month earlier and undershooting analyst forecasts of a 6.7% increase, a rare positive for the embattled economy, Reuters reported. Inflation in the 12 months through September hit 83%, as the South American country fights to rein in surging prices that are sapping people's wages and savings. Prices were up 66.1% in the first nine months of the year.

Argentina's economy minister Sergio Massa said on Thursday that he will meet Paris Club officials on Oct. 27 and 28 in France to wrap up negotiations over $2 billion in debt that the country owes to the creditor group, Reuters reported. Talks will include the repayment schedule and the interest rate for the loan from the creditors which include the governments of the United States, Germany and Italy. The Paris Club last year gave Argentina more time to repay the debt, which allowed Buenos Aires time to negotiate a revamp of its IMF program.

Argentina's inflation rate likely eased slightly in September to 6.7%, a Reuters poll of analysts showed, but remained stubbornly high overall, supporting forecasts that it could top 100% this year, the highest annual level since the early 1990s, Reuters reported. That monthly rate would be lower that a 7% price rise in August and a July peak of 7.4%. The South American country has been battling to bring down one of the world's highest inflation rates. The projections were made by 16 analysts surveyed by Reuters, with estimates ranging between 6.5% and 7%.

The International Monetary Fund (IMF) has reached a staff-level agreement on Argentina's $44 billion extended fund facility arrangement, which should unlock nearly $4 billion in funds for the country, the lender said on Monday, Reuters reported. The approval, which needs to be ratified by the IMF executive board, would unlock $3.9 billion for the embattled South American nation, which is looking to rebuild reserves and tamp down spiraling inflation. Argentina, a major grains producer, struck a new IMF deal earlier this year to replace a huge failed program from 2018.