Argentina’s dollar bonds fell in early trading Wednesday after the government said it would force state-run institutions to sell the securities to the private sector.
(Bloomberg) — Argentina’s dollar bonds fell in early trading Wednesday after the government said it would force state-run institutions to sell the securities to the private sector.
About $16.1 billion in bonds due 2030 fell as much as 1.4 cents to around 27 cents on the dollar, a three-month low. Bonds due 2041 followed suit, slipping 1.3 cents to around 26 cents on the dollar.
The move aims to preserve the central bank’s dwindling cash reserves and ease pressure on the official exchange rate, according to Economy Ministry officials. The government is trying to avoid a sharp one-time currency devaluation that would fuel inflation already running at more than 100%.
The government will issue two decrees to execute the change. The first will force public sector institutions to sell dollar debt to the market under local Argentine law through a schedule that policy makers will establish. The second will mandate the same institutions to swap their global bonds controlled under New York law for bonds in pesos.
Separately, the government is reopening the sale of local-law, dollar bonds that mature in 2029. Economy Minister Sergio Massa will meet with financial sector executives Wednesday morning to pitch the offer.
An Economy Ministry spokesman declined to comment.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.