Argentina to Disclose Loan of Up to $6 Billion Next Weekby and
Loan to be backed by dollar-denominated bonds: Prat-Gay
Farmers have sold $4 billion worth of crops under Macri
Argentina’s central bank will announce a financing agreement worth as much as $6 billion with a group of banks next week as the government of President Mauricio Macri looks to rebuild reserves from a nine-year low inherited from the previous administration.
Finance Minister Alfonso Prat-Gay, speaking to foreign correspondents, said that the total amount from the loan will be between $4 billion and $6 billion. The loan, which was first mentioned publicly Dec. 16, will be backed by dollar-denominated bonds held by the central bank.
The new government, which took over Dec. 10, devalued the peso 27 percent by letting the official rate float and eliminated export tariffs on most crops, which has sparked a 6 percent rebound in central bank reserves to $25.6 billion. Farmers have sold $4 billion worth of soybeans, corn and wheat since Macri cut export taxes and eliminated permits that were previously required to export the goods, Prat-Gay said.
Locked out of capital markets during a decade-long legal battle with holdouts from the 2001 default, Argentina has struggled with a dollar shortage that has had a knock-on effect on the economy. The loan won’t be affected by the same restrictions imposed on Argentina by the New York court that ruled in favor of creditors and caused Argentina to default for a second time in 13 years in 2014, Prat-Gay said.
“The central bank is an independent entity and like any other central bank it can administrate its assets as it wishes,” he said.