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Argentines Yank Savings From Inflation Funds on Default Fears

  • Government has tried to assure investors on repayment
  • Inflation-linked debt is estimated to be 80% of peso debt
The Central Bank of Argentina in Buenos Aires, Argentina, on Friday, Feb. 25, 2022. 

The Central Bank of Argentina in Buenos Aires, Argentina, on Friday, Feb. 25, 2022. 

Photographer: Sarah Pabst/Bloomberg
Updated on

Argentines are yanking cash from funds focused on inflation-linked assets on speculation a growing local debt burden amid surging consumer prices will prove unsustainable for the government. The underlying notes fell for a second day.

Locals pulled out almost 30 billion pesos ($246 million) on Thursday, or 5.3% of total assets in inflation-linked funds, according to local consulting firm 1816 Economia & Estrategia. Withdrawals this month have sapped about 10% of the total assets, the biggest drop on record, according to the company.