World Markets

Argentina auctions dollar-linked bond, other debt for $1.52 bln to bolster peso

Credit: REUTERS/AGUSTIN MARCARIAN

Argentina auctioned a dollar-linked bond and other debt for a total of about $1.52 billion on Tuesday, the economy ministry said, as the government looks to ease pressure on the battered peso currency.

Updates with final figures on debt issuance

BUENOS AIRES, Oct 27 (Reuters) - Argentina auctioned a dollar-linked bond and other debt for a total of about $1.52 billion on Tuesday, the economy ministry said, as the government looks to ease pressure on the battered peso currency.

Argentina issued around 1.66 billion pesos ($21.2 million) of the dollar-linked bond at 0.10% annual interest, the ministry said, part of a series of new measures by the government and central bank to stem the worsening economic turmoil in the country.

The trading volume of the five new instruments will serve as a measure of confidence in the policies of President Alberto Fernandez as his administration looks to stimulate peso savings and avoid further currency devaluations, traders said.

"The issuance of an 18-month dollar-linked bond will surely be a great success, which could appease devaluation expectations in the very short term," said local firm Delphos Investment.

"However, the debt issuance itself could dilute quickly if not accompanied by a clear fiscal and monetary path for the next few months."

Argentina issued around $1.8 billion in a dollar-linked bond on Oct. 6, a move the Economy Ministry said would help expand the government's financing options, cover short-term repayment needs, soak up excess pesos and widen the local debt market.

The country is headed for an economic contraction of about 12% this year, which would be the third straight year of recession. The gap between the official rate and the black market peso was about 134.9% on Tuesday.

(Reporting by Jorge Otaola and Walter Bianchi; Writing by Cassandra Garrison; Editing by Jan Harvey and Richard Chang)

((Cassandra.Garrison@thomsonreuters.com; +54 11 5830 7443;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

US Markets

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More