“There are a captive market“said the economist Martín Redrado, as he analyzed the dynamics of the dollar in the country and the expectations regarding the new bond until 2029 that the government will place today. Analyzing the nature of public financing and the objectives of this placement, the former president of the Central Bank explained: “This is not an exit from the international capital market and.” This raises dollars so the government can finance itself and renew debts that come due.”
The head of Fundación Capital was on LN+ and in an interview expressed his opinion on the government’s intentions with this debt tender in dollars, the first for the State Treasury since January 2018. “There is a captive market, These are the dollars that Argentinians have deposited in the banks in recent months, especially during the electoral period,” he explained, referring to the funds that the government could target.
Redrado also noted the performance of these debt securities when comparing their capabilities with those of other government bonds with similar maturities already listed on the market. “The interest rate is key because the Treasury paid for these types of bonds today. According to the price that these bonds had until yesterday, it was just under 10%. (Now) he is talking about an interest rate of less than 9%,” Redrado commented, although he added a “caveat” about today’s placement: “These are ‘Argendolares,’ these are Argentine dollars, they are not dollars that come from abroad.”
Beyond the bond issue, Redrado continued to speak about the importance of reducing taxes on agricultural production and exports, analyzing the impact that the cut announced yesterday will have on the Argentine economy. He explained: “It is a good sign, namely to reduce taxes, to relieve the productive sectors of the tax burden.” The wheat harvest is going very well, we had good weather.” We expect to have at least $700 million more than last year. And that will also ease the exchange rate pressures that may arise during the holidays, especially among people buying dollars to go abroad.”
In addition, Redrado highlighted the difference between financial investments and “real dollars” when making the comparison the dynamics of real investments in infrastructure compared to capital flows destined for bonds or other short-term financial instruments. “The most important thing in exchange and financial matters is that production, exports and real investments are relevant, not so much financial, because financial come and go and create more uncertainty in the future,” Redrado said, adding: “We need real investment money: build factories, hire people, build a warehouse, that is, bury dollars in Argentina.”
Looking ahead to 2026, Redrado emphasized the importance of creating new jobs in the country. “The big challenge is to create jobs. The basis of every economy and every economic policy is not financing, not the placement of bonds, but that economic policy creates more employment. Now it’s starting to attract international interest in the country, but of course “It will be up to us to get the economy growing again.”he concluded.
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