Argentina

Argentina’s central bank said payment intermediaries will have to enable debit card transactions in US currency by Feb. 28, marking a key step in President Javier Milei’s pledge to dollarize the economy, Bloomberg News reported. The bank also developed a program to allow people to make installed payments in either dollars or pesos. The move aims to “bolster currency competition in order to allow people and businesses to use the currency they wish in their daily transactions,” according to a central bank statement on Thursday.

Argentina's central bank will slow the rate of the local peso's devaluation, it said on Tuesday, after new data showed annual inflation slowing in December and as the central bank sees continued progress on inflation, Reuters reported. Beginning in February, the rate, known as the crawling peg, will slow to 1% per month from a prior rate of 2% due to "the consolidation observed in the inflationary trajectory during the last few months, and in the expectations of a decrease in inflation," the central bank said in a statement.

Argentina paid international bondholders before a Thursday deadline, marking another step in President Javier Milei’s efforts to restore investors’ confidence in the serial defaulter, Bloomberg News reported. The government had some $4 billion worth of debt, between principal and interest payments, due on a slate of hard-currency notes. The payment included some $2.65 billion of credits issued under New York law in a 2020 restructuring. Finance Secretary Pablo Quirno said on a post on X Thursday morning that the government made its debt payments, without giving further details.

Argentina's state airline, Aerolineas Argentinas, is slimming down for a potential sale, shedding 13% of its staff, cutting money-losing domestic routes and even removing snacks formerly available to passengers, according to sources and documents seen by Reuters. The cutbacks, many of whose details were previously unreported, are part of a backdoor attempt to trim the airline's burden on the state and lure private investment. The drive is progressing, even though libertarian President Javier Milei's plans to privatize the firm have generated pushback.

Argentina unveiled a $1 billion repurchase agreement with five international lenders that will help replenish foreign reserves at its central bank, a key victory for President Javier Milei as he works to stabilize South America’s second-largest economy, Bloomberg News reported. The deal, commonly known as a repo, will be in place for two years and four months, the monetary authority said Friday in a statement, without naming the banks. Citigroup Inc. participated in the repo, according to two people with direct knowledge of the matter.

The International Monetary Fund’s executive board is set to review Argentina’s current $44 billion aid program next month, according to people familiar with the matter, a crucial step as President Javier Milei negotiates for a new loan, Bloomberg News reported. The board is tentatively set to meet in early January to evaluate a staff report on the agreement Argentina struck with the IMF in 2022, said the people, who spoke on the condition of anonymity as the details haven’t been made public.

Argentina’s economy expanded more than expected in October, continuing to show signs of recovery after surpassing growth forecasts in the third quarter too, Bloomberg News reported. Economic activity rose 0.6% from September, more than the 0.2% median estimate of economists surveyed by Bloomberg. From a year ago, activity fell 0.7%, according to government data published Friday. Wages in Argentina also grew 4.6% in October from September, surpassing monthly inflation for the seventh straight month after price increases wiped out paychecks earlier in the year.

Argentina is weighing whether to introduce a managed exchange rate regime — a “dirty float” — once it lifts its current foreign exchange controls in 2025, according to policymakers, Bloomberg News reported. The South American nation has been restricting foreign exchange and capital market operations for the past five years, forcing exporters to sell their dollars. The controls are also preventing companies from sending dividends abroad and limiting individuals from buying foreign currency.

Argentina's economy is expected to have contracted 2.6% in the third quarter of 2024 versus a year earlier, the sixth straight such decline, but expanded against the quarter before, breaking a technical recession going back to the end of last year, Reuters reported. A Reuters poll on Thursday, involving 13 local and foreign analysts, gave the year-on-year contraction of gross domestic product (GDP), which follows a 1.7% contraction in the second quarter and a steep 5.1% drop in the first quarter.

Argentina’s monthly inflation slowed to the lowest level since July 2020, handing President Javier Milei another victory on voters’ biggest concern a year after taking office, Bloomberg News reported. Consumer prices rose 2.4% in November, compared with the 2.8% median forecast of economists surveyed by Bloomberg. Annual inflation slowed to 166%, according to government data published Wednesday.