Argentine Banks Flee to One-Day Notes Amid Government Transition
- Banks now switching from 28-day notes to protect liquidity
- Move could dump pesos into economy, boosting inflation
Customers wait in line outside a Banco Galicia bank branch in the financial district of Buenos Aires on Nov. 21.
Photographer: Erica Canepa/BloombergArgentina’s banks are fleeing to short-term notes issued by the country’s central bank for even more liquid securities as President-Elect Javier Milei’s vague comments on the debt have stoked concern over how he’ll handle the assets once in office.
Lenders are preferring to replace so-called Leliq notes with shorter, lower-yielding securities in order to boost liquidity. They rolled over only 10% of the 1.8 trillion pesos of debt instruments offered by the central bank at auction Thursday, according to people with direct knowledge of the matter. That’s down from 40% in the Tuesday auction, which was already a sharp pullback from before the vote.