The 2026 budget bill, which received semi-approval in the Chamber of Deputies this week, authorizes the executive branch to “borrow public debt and increase other liabilities” for $288.7 billion. an amount equivalent to 202,891 million US dollars at the average exchange rate provided for in the initiative (1,423 USD).
In addition, Article 41 of the Budget allows the Ministry of Finance to issue public securities in foreign currency and under external jurisdiction. for up to 18% of total authorized debt, representing a cap of $36,520 million.
This approval is crucial after, in early 2021, during the government of Alberto FernandezThe law on the sustainability of national debt was passed, which obliges the Ministry of Economic Affairs to do so Ask Congress for approval every time it issues debt under foreign law.
Days ago, in accordance with local legislation, the government issued a dollar bond with which received $910 million at an annual rate of 9.26%. The performance confirmed in the tender once again reflected the weight of the country’s credit history – nine in total Default values– and the doubts of some investors about the level of international reserves. In recent weeks, companies and provinces have also come to the market to issue debt, many under New York law. with rates around 8%lower than that of the instrument introduced by the Minister of Economy Luis Caputo.
However, the picture changed after the Governor of the Central Bank (BCRA) announced a change in monetary policy. Santiago Bausiliwho announced that the company has committed to purchasing reserves starting in January. The signal was well received by the market and was reflected in a decline in country risk of more than 50 basis pointsuntil 572 units were reached.
The government’s financial calendar has an important date coming up: Coupons and interest on government bonds expire on January 9th. The latest release of Bonar 2029 provided partial relief to the economic team, while the Treasury has been buying small amounts of currency in the foreign exchange market in recent weeks. However, To reach a total term of $4.2 billion, approximately $2.2 billion still needs to be raisedaccording to estimates by the economist Fernando Marull.
Specifically, Argentina faces approximately $2.7 billion in capital payments under Bonares (local law) and Global (foreign law). Add another $1.6 billion in interest.
A look at the next two years of Javier Milei’s leadership, the Treasury and Central Bank’s maturities with private creditors, the International Monetary Fund (IMF) and the Paris Club will be approximately $13.8 billion in 2026 and $18 billion in 2027. according to a report from consulting firm 1816.
“These numbers no longer look as challenging as they did before the election, but They reflect the importance of Argentina’s return to the market and to avoid an external shock slowing the normalization of credit. The ability to refinance debt is crucial for purchasing foreign currencies “In the foreign exchange market, it is an economic policy option or an imperative for the state to continue to fulfill its obligations,” explained the consulting firm, one of the most read in the City Buenos Aires
The last time Argentina placed debt under foreign law was in January 2018when Caputo served as finance minister in Mauricio Macri’s government. On this occasion The country spent $9,000 million in three bonds with terms of five, ten and thirty years. Since then, almost eight years have passed without access to this type of financing.
“Access to financing will be possible when the market recognizes that the central bank is buying reserves and that will accelerate the decline in the country’s risk,” said Deputy Economy Minister José Luis Daza this week in the Streaming officially shit.
At the moment, the debt of the Argentine state in foreign currency is 250,775 million US dollars, while the debt in pesos is equivalent to $192,697 million at the current exchange rate. These figures do not include the liabilities of the central bank or the debt taken on by provinces and municipalities. Debts to international organizations now total $94,704 million, of which $56,771 million are obligations to the IMF and the rest is distributed mainly between the IDB, the World Bank and other multilateral organizations.
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