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Argentina Will Buy Bonds From Local Funds Hit by Withdrawals

  • Mutual funds had suspended redemptions as investors wanted out
  • Government is taking desperate measures to shore up finances
Fears of Argentina Default Loom Large as Traders Dump Everything
Photographer: Erica Canepa/Bloomberg
Updated on

Argentina’s central bank is trying to stem investor panic and stabilize the mutual fund industry after many of the country’s biggest funds suspended investor withdrawals in the wake of the government’s default on $7 billion of local debt.

The bank offered to buy local notes held by the funds, providing liquidity that they in turn can use to meet a surge in investor redemption requests. The rush for the exits was so intense Thursday after the cash-strapped government announced it was forcing local bond investors to accept longer maturities that more than a dozen mutual funds halted withdrawals.