Argentina’s government is in talks with several banks to obtain a loan agreement of around US$2.7 billion for about three years in order to meet its principal debt obligations next January, according to a person familiar with the negotiation.
Banco Santander SA and JPMorgan Chase & Co are most involved in talks for the so-called “repo line” that’s being carried out by Argentina’s Central Bank, according to another person with direct knowledge. Both requested anonymity to discuss the private negotiations.
It’s unclear how much money Argentina would receive from each bank, nor the collateral the government is putting up in the deal.
Santander didn’t immediately reply to requests for comment. JPMorgan declined to comment. Economy Minister Luis Caputo spoke before a crowded room Wednesday at an event organised by Banco Santander SA’s corporate and investment banking division on the sidelines of the IMF annual meetings.
President Javier Milei’s economic team, which is in Washington this week attending the International Monetary Fund and World Bank Group’s annual meetings, has started to telegraph the country’s vision for what a new programme with the IMF could look like. Formal negotiations with the Fund have yet to begin, one of the people said.
Argentina’s US$44-billion programme, originally negotiated by former president Mauricio Macri and renegotiated by Milei’s predecessor Alberto Fernández, is the Washington-based lender largest — and its 22nd with the crisis-prone country. Argentina is counting on the IMF for an injection of reserves only it can offer for Milei to dismantle an edifice of capital and currency controls left behind by the last government to reenter capital markets and reboot economic growth.
A wide gap still remains between Fund staff and Milei’s economic visions. The Fund has repeatedly asked for positive interest rates, more flexible currency policy and rebuilding of foreign reserves that are seen as the weakest part of Milei’s economic programme. Tensions peaked in September when the IMF pulled Rodrigo Valdes, its top negotiator, from the program after Milei railed against him as “truly irresponsible” for greenlighting the previous government’s policies.
On Wednesday afternoon before a group of investors, Caputo said Argentina was considering all options to lift capital controls, even in the absence of a new programme with the Fund, according to people with direct knowledge. The economy minister expects inflation to converge to the peso’s two-percent monthly devaluation rate, known as the crawling peg, which Milei has previously said could trigger a slowdown of the crawl to one percent a month.
Milei also noted recently that once he lifts capital controls, he’ll opt for a “flexible” exchange rate, without providing more details.
by Manuela Tobias & Jorgelina do Rosario, Bloomberg
