For investors, the approval of the 2026 budget was as important as the powerful way in which it was implemented. He driver or impetus that the market will have in this short week is Congress. The government has shown that it can get the votes it needs for key reforms in its administration, including labor reforms. The division of Kirchnerism and the contribution of provincial and independent legislatures opened a loophole through which Libertad Avanza can achieve the necessary majorities.
Politics and debt maturities on January 9th were the anchors that prevented the market launch in 2025. There has never been a year as volatile. Maybe the last week of the year will manage to eclipse the previous ones. Regarding debt repayment, the words of the Minister of Economic Affairs resonate: Luis Caputo: “We will try to ensure that there is no transmission in New York in January. The aim is to gradually eliminate the country’s dependence on Wall Street.”
Added to this is the statement by the president of the nation Javier Milei which was definitely, “We will pay.” Therefore, the measures aim to exploit the savings of Argentines in dollars, both abroad and domestically, and to recreate, with private capital, together with the “Fiscal Innocence”, a system like the AFJP of the time.
Anyway, Access to the international capital market is a utopia as the country risk remains at 570 basis points and it is impossible to lose 120 points in ten days. Therefore, we need to think about new ideas to raise around $2.35 billion and remove the $500 million that is in the hands of the Central Bank and the Anses Guarantee Fund from the maturities of $4.2 billion.
This amount will decrease if the VII Cavalry arrives in the form of a payment of $700 million to the state for the privatization of dams or if some of the companies that have issued negotiable commitments in dollars liquidate part of their income. Three times the amount remains unliquidated to cover the remaining balance. Companies have 180 days to liquidate the dollars they have collected from the central bank.
Consulting firm 1816 suggests four alternatives to the government to cover January dues
- Reopen BONAR 29 or give it a similar title. At this time, the BONAR 29 is trading on the secondary market at a price of $90.5 against MEP, which is a rate of 9.55%. However, the government could reopen the title at a rate close to 9 percent.
- Place dollar securities due in 2026 or 2027. If the government wanted to obtain financing for more relevant amounts, perhaps even enough to pay the July maturities, it could start a program of short-selling securities, like the Letes program that existed in the Macri era. The potential demand for these securities, in our opinion, would be enormous, considering that the stock of private sector deposits in the local financial system is record-breaking (US$ 36.5 billion is invested at an average interest rate close to 0) and that dollar FCIs today manage almost US$ 11,000 million (and half of this is accounted for by money market funds, which generate an average annual return of 1.7%). The downside to issuing short letes or bonares (due in 2026 or 2027) is that a growing stock of paper maturing before the presidential election could be generated, concentrating the difficulty of debt management in 2027.
- Use the pesos that the Treasury has in commercial banks. If for some reason the government did not want to spend in dollars, it could draw on existing pesos and purchase foreign currency from the central bank. Today, in addition to dollar deposits at the BCRA, the Treasury has $3.4 trillion at the Central Bank (equivalent to $2.3 billion) and $15.3 trillion at commercial banks (equivalent to $10.6 billion). The problem with using pesos in commercial banks is that they are pesos that already exist in the system and have been lent to the private sector or in LECAP, for example. In other words, the use of these pesos would put upward pressure on domestic interest rates.
- Ask Wall Street, but about REPO. Caputo has repeatedly said that international banks have offered up to $7 billion to the country. The disadvantage of this alternative is that the Globales and Bonares are increasingly becoming subordinated debts: Argentina already has senior debts with the IMF ($56.8 billion), with China (activated tranche of the swap for $4.9 billion), with the United States (swap for $2.5 billion) and has also signed REPOS in 2025 ($3 billion due in 2027 and guaranteed by BOPREAL become).
The consulting company F2, which is running Andres Reschini, emphasizes “the intervention of the Ministry of Finance to mitigate volatility. The volume in the Mercado Libre de Cambios (MLC) is growing, indicating that the market is increasingly willing to carry more foreign currencies, which is around 1,450 US dollars per dollar, which is slowing down the accumulation of foreign currencies through government bond purchases.”
Regarding the rate hike, he points out that “the peso curve continues to adjust its yields upwards, with the shortest section showing a yield of around 2.5%. Meanwhile, inflation expectations have stopped growing and the big challenge for the government is now to push them down without the anchor of the exchange rate system at 1%, which will be at 2.5% in January. The Innocence Project is its axis.”
Meanwhile, Bitcoin’s decline this year continues to surprise abroad. The Buenbit report notes that 2025 “will be a paradoxical year for the crypto ecosystem.” From a policy and regulatory perspective, the sector has achieved almost everything it asked for: an openly crypto-friendly administration in the White House, concrete progress in the framework for stablecoins and tokens, increasing integration with the traditional banking system, and a second wave of investment vehicles (ETFs, DATs, IPOs) that expanded the offering for institutional and retail investors. Still, Bitcoin is on track to end the year with a weak performance after an intense rally and an equally abrupt adjustment, leaving the broader market under pressure.
The 2025 foreign investment app as a turning point: “Not so much because of prices, but because the new structural regime of the crypto market has just been introduced, in which institutional liquidity, regulation and derivatives weigh as much or even more than the “purely technological” narrative of previous cycles.” The key to 2026 lies not only in whether Bitcoin can rise to $150,000, but also in how the relationship between flows, regulation, actual adoption and expectations will rearrange itself.”
The market is preparing for a good rise in bonds and stocks as the short-term horizon was absolutely clear. This move could be accompanied by a slight fall in interest rates as fixed deposits will start to rise due to the new regulation that allows mutual funds to invest a higher percentage of their portfolio with banks.
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