The government launches a plan to add USD 3,000 million and strengthen reserves

The national government will launch its strategy this week to increase the reserves of the Central Bank. It aims to secure an initial tranche of USD 3 billion through two mechanisms: the expansion of a repo loan with international banks and a new debt auction that will seek to raise up to USD 1 billion.

The operation is part of a broader goal to obtain USD 9 billion through private financing, a key buffer in the current negotiations with the International Monetary Fund (IMF) and in a scenario of negative net reserves.

Details of the new loan with banks

The Central Bank plans to close this Wednesday the expansion of the repo agreed in December, when it obtained USD 1 billion at an annual rate of 8.8%. This time, according to its president Santiago Bausili, the rate would be lower.

In that initial operation, Bopreal bonds were delivered for USD 1.75 billion in exchange for the dollars. In this second tranche, better conditions are expected.

However, not all the money received will impact net reserves, according to Portfolio Personal Inversiones (PPI) as explained to Infobae.  "Only USD 500 million would be counted as an improvement in reserves", they detailed. The IMF doesn't count certain tranches of private debt as accumulation.

The Economy Ministry seeks to raise USD 1 billion through an auction

The other source of financing will be a public debt auction, which will be announced to investors this Wednesday. The Economy Ministry could offer fixed-rate peso-denominated securities, instruments linked to the exchange rate, and even dollar-denominated bonds.

This last option—directly issued dollar-denominated bonds—would mark a significant change in Javier Milei's government's financing strategy.

The first significant maturity will be on June 18, with a commitment of 4.9 trillion pesos (10.8 billion pounds) corresponding to a Lecap. In total, there will be two auctions during the month.

Foreign investors will be able to participate with dollars

As part of the package of measures, the government will allow resident and non-resident investors to purchase debt with maturities longer than one year using dollars. The monthly limit will be USD 1 billion.

In addition, the Central Bank will eliminate minimum term restrictions for non-residents operating through the Mercado Libre de Cambios (MLC) or in primary Treasury placements with maturities longer than six months.

Meanwhile, the Center for Strategic Planning (Cepec) emphasized to Infobae that this is a "cautious" approach, but with potential. "If fiscal confidence is maintained, it could become a stable source of reserves", they pointed out.

Other sources of dollars: privatizations and asset sales

Beyond external financing, the economic team is also considering other sources of foreign currency:

• Privatization of state-owned companies
• Sale of state assets
• Purchase of dollars by the Treasury, if the exchange rate allows it

The official plan seeks to narrow the gap with the IMF, ensure liquidity, and stabilize market expectations amid a country risk that remains above 600 points.