Santiago Cafiero, a chancellor of Argentina, held discussions in Brussels in a bid to strengthen and integrate ties with the European Union. The foreign minister said today that from the temporary presidency of CELAC (the community of Latin American/ Caribbean States), we are consolidating and recovering the bi-regional political discussion with the EU. Cafiero further said he will meet Joseph Borrell to deepen the ties by convening a summit in Brussels soon.
The acting head of CELAC, Albert Fernandez, the president, has held his position since January 2022. The VII summit will be held on January 24, 2023, in Buenos with the participation of the heads of the states of CELAC.
Argentina Decides To Improve Debt Profile
In the latest world news, the South American Nation, Argentina decided to strengthen its debt profile through the buyback of foreign bonds. It expects to spend around $1 billion despite having low cash reserves. According to a communique on Wednesday, Sergio Massa, the economics minister of Argentina, is looking to impress the markets.
The minister said the move will commence with immediate effect benefitting from a window of opportunity that arises after a recent fall in the debt risk index. The initiative will cover the sovereign notes that will mature in 2029 and 2030.
Massa said the move expects to improve the nation’s access to capital markets. It banks on the nation’s efforts to reduce rampant inflation, replenish its forex reserves, and augment its weak local peso currency.
After reaching a peak in the middle of the previous year, the nation’s risk index dropped over 1,000 points. The nation targets short-term maturity bonds as a first step to benefit from this window of opportunity.
The 2030 bonds jump by 7.1%
According to BNN news, the 2030 bonds gained to 35.69 (up 7.1%) on the dollar at 11:15 AM today. Masso further stated the nation will invite the private sector in improving its debt profile soon and the current step is one such measure.
The sovereign bonds of Argentina languish in the distressed territory though the nation implemented a significant restructuring in the year 2020 involving private creditors. Gletir Corredor de Bolsa’s chief strategist, Walter Stoepplewreth, said the main aim of the exercise is to narrow down the gap between the prominent parallel currency markets and the peso dollar exchange rate.
Walter further stated the main aim of this task is to provide relief to the parallel dollars. However, the lower cash reserves pose a challenge to the nation’s monetary program. The nation holds reserves of around $43 billion. However, its actual reserves are still lower. It also banks on the capability of the team of Massa in handling the economic situation. Argentina’s real cash reserves seem to be hovering at $6.08 billion.
Armando Armenta said global debt valuations of Argentina show the lack of confidence by the investors in its economic policies rather than its fundamental weaknesses. The latest steps taken by the government show its willingness to improve the confidence levels of investors to some extent. However, the sustenance of this program will depend on the effectiveness of future measures.