Argentine banks have latched on to a lucrative trade that produces all-but-guaranteed profits while also allowing local corporations to sell dollar bonds paying coupons as low as 0%.
They’ve turned to a loophole in complex currency regulations meant to keep dollars from flowing out of the country. To profit from it, banks buy dollar-denominated local bonds, then sell them for pesos in an unofficial market where the dollar is much stronger. They then swap those pesos for dollars at the official rate, profiting from the exchange-rate gap.
