Argentina may use China swap for 2027 needs — Buenos Aires Times
Argentina may use its currency swap with China if it is unable to refinance dollar-denominated bonds known domestically as Bonares in 2027. Economy Minister Luis Caputo said this after a closed-door meeting with investors in Bangkok during the International Monetary Fund and World Bank meetings, Buenos Aires Times reports.
According to Caputo, investors were interested in Argentina's financial program for 2027, including the possibility of refinancing Bonares. The minister noted that if such refinancing proved impossible, the government could use the Chinese swap.
Financing plan for 2027
In July, the government of President Javier Milei announced plans to issue $5 billion in Bonares bonds in 2027 as part of a $25 billion financing package. However, in mid-August, Caputo suspended their issuance amid high US Treasury yields.
Previously, the bonds provided the government with the necessary hard currency, as Argentina has yet to return to international capital markets. Concerns over a possible financing shortfall and Milei's intention to seek re-election in the next presidential election, according to the publication, raised the country's sovereign risk to 600 basis points. At the beginning of July, it stood at 410 points.
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Chinese and US swaps
In August, Argentina's monetary authorities extended the $19 billion swap line with China's central bank for another five years. The activated portion of this agreement amounts to $5 billion — the same amount the government planned to issue in Bonares bonds in 2027.
Caputo also said that a separate $20 billion swap line with the United States remains one of the possible tools next year to reduce market volatility ahead of the election. At the same time, he did not describe it as a means of covering a possible shortfall related to Bonares.
In Bangkok, the minister also separately met with IMF chief Kristalina Georgieva and World Bank President Ajay Banga. According to the publication, the World Bank is assessing the possibility of increasing the amount of funds available to Argentina.
