A few days ago, Minister of Economy Luis Caputo confirmed on his social media account X that on January 9th, the country will pay around US$1.6 billion to holders of restructured sovereign bonds by former Minister of Economy Martín Guzmán. Despite the Central Bank buying dollars daily, accumulating around US$2.9 billion during the presidency of Javier Milei, and a significant devaluation, the government faces the year 2024 with large maturities of foreign currency public debt that far exceed the country’s reserves, which remain negative. These large payments will require a rapid recovery of the country’s banking reserves.
In 2024, the Treasury will face foreign currency maturities of approximately $16.8 billion, of which $7.5 billion belongs to the International Monetary Fund. As for government bonds, the maturities total $4.4 billion, although roughly half is held by the public sector. The remaining $5 billion corresponds to obligations with the Paris Club and other organizations.
Santiago Manoukian, the research manager of Ecolatina, examined the flow of foreign currencies.
“The IMF deliveries between December 2023 and December 2024 would currently amount to nearly $6.6 billion USD. December [2023] has not yet ended,” said Santiago Manoukian, head of research at the consulting firm Ecolatina. “So, taking into account the payment already made by Argentina in December, of $920 million USD, the net payments to the Fund in this period total around $1.9 billion USD: payments of $8.5 billion, deliveries of $6.6 billion.”
All of this will depend on the renegotiation of the agreement, in which the government could try, for instance, to avoid any net payment to the organization this year.
The months with the highest outstanding payments will be January and July. In January, the commitments amount to around 4 billion US dollars (approximately 2 billion dollars to be paid to the IMF). The government will also have to deal with coupon payments and the first installment of amortization to bondholders, totaling almost 1.6 billion US dollars. The remaining debts are owed to the Paris Club and other international organizations.
Regarding July, the due dates will be approximately US$ 3.9 billion. Out of that amount, US$ 2.8 billion is owed to bondholders, US$ 500 million is due to the Fund and the rest to the Paris Club and other institutions. After that, the amounts are smaller but still challenging for a Central Bank due to its negative net reserves.
Since the inauguration of Milei, the Central Bank has made purchases totaling nearly $2.9 billion, which would allow them to meet their obligations to bondholders on January 9th.
Pedro Siaba Serrate, head of research and strategy at Portfolio Personal Inversiones, stated that net reserves remain negative, around US$9.700 million, despite the purchases made by the new government. “However, the market always anticipates itself and therefore focuses on the outlook for the coming months, where we should see greater fiscal prudence, a potential normalization of the exchange market, and a favorable harvest of coarse grains,” he said. “This context, which promises a higher accumulation of reserves and lower financing needs, allows us to be optimistic about payments in 2024.”
In comparison to the upcoming years, 2024 will have the lowest number of due dates in the next decade, according to information from Portfolio Personal Inversiones. The agreement with the International Monetary Fund (IMF) at the time of writing states that foreign currency due dates amount to $17.5 billion in 2025, $18.2 billion in 2026, with a peak of $22.2 billion in 2027, and $21.7 billion in 2028. Until 2035, due dates do not drop below $14 billion per year, including due dates with the IMF, bonds, and other multilateral organizations.
