Argentina’s economy ministry announces the use of $1.5 billion from the central bank to pay interest on “Globales” and “Bonares” bonds, leveraging a financial surplus. President Javier Milei’s economic reforms continue.
Bollywood Fever: Argentina’s economy ministry announced on Sunday that it will utilize just over $1.5 billion from the central bank to cover the total interest on the country’s “Globales” and “Bonares” bonds, which are due in January 2025. This move aims to leverage part of the financial surplus accumulated in the first half of the year, which amounted to 2.3 trillion Argentine pesos ($2.5 billion) by May, according to the ministry’s statement.
The ministry specified that $1.528 billion will be deposited into an account at trustee Bank of New York, designated exclusively for paying the interest on the bonds.
This announcement follows a significant policy statement from the government of libertarian President Javier Milei, who outlined plans to halt the expansion of the monetary base to combat the nation’s nearly 300% annual inflation rate.
Milei, a staunch free-market economist, has initiated a stringent austerity program since taking office. His measures include cutting state spending and pledging to rebuild Argentina’s depleted foreign exchange reserves.
In the early months of Milei’s administration, the central bank embarked on an aggressive dollar-buying spree, essential for meeting creditor obligations. The accumulation of reserves is crucial for restoring economic and financial stability after years of crisis. It is also pivotal for the government’s commitment to dismantling restrictive currency controls that have hindered business and trade activities.
By taking these steps, Milei aims to create a more stable economic environment, reduce inflation, and boost investor confidence in Argentina’s financial system. The upcoming interest payment on the bonds marks another critical step in the government’s broader strategy to ensure financial stability and economic growth.
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