The government issued another US$500 million in debt and is paying more than 28% in pesos over five years.

This Friday, the government placed another $500 million in five-year debt on the local market with international investors , as an alternative to increasing reserves at the Central Bank (BCRA) and meeting the goal of the agreement with the International Monetary Fund (IMF).

The yield on this stock remains very high, considering that the market expects annual inflation of 20.9% over the next 12 months, and that if Javier Milei's economic program holds firm, inflation will continue to fall. In other words, the real interest rate will be very positive (far outperforming expected future price developments).

In today's bidding process, the Ministry of Finance awarded $6.367 billion, having received bids totaling $7.996 billion, according to an announcement by Secretary Pablo Quirno, right-hand man to Economy Minister Luis Caputo.

Given the government's debt maturities, this implies a rollover of 167.59%. The $1.975 trillion in excess of its commitments will be deposited in the Treasury's account at the Central Bank of Argentina (BCRA), and will likely be used to purchase dollars to pay the July debt. The Ministry of Economy must pay approximately $5 billion on July 9th.

Other short-term bills and bonds (maturing in July, August, September, November, January, and June 2026) and capitalizable interest (added to the principal upon amortization) were placed at rates between 2.24% and 2.60% monthly or between 30.45% and 36.11% annually, again above market-projected inflation. This is helping the government make its bidding more attractive.

The reopening of the Bond 2030—with a five-year maturity and the possibility of exit in 2027, before the presidential elections—is one of the measures in the package announced Monday by the economic team to purchase reserves and meet the IMF target, without the Central Bank intervening within the exchange rate bands.

The Ministry of Finance has set a limit of US$1 billion per month for the placement of debt with dollar subscription for peso-denominated instruments, with the possibility of raising up to US$7 billion during the remainder of the year.

As part of the package, this week the Central Bank closed a $2 billion repo operation with international banks, which have also added to the reserves.

Prior to this tender, the government had opened up the possibility it had previously closed: allowing foreign investors to enter the local market, purchase financial assets, and exit freely, without a permanence period.

Previously, the economic team had set a minimum period of six months before being able to take money out of the country in April. That was when the currency controls were lifted, but the measure lasted only two months.

The change in this "macroprudential" regulation was criticized by some economists, given that "speculative" capital can now generate short-term runs, as in 2018 and 2019, when Mauricio Macri's program collapsed.

Along the same lines, the National Securities Commission (CNV) on Thursday expanded the exceptions to the $200 million daily limit for transfers of negotiable securities abroad and included foreign funds, allowing them to exceed that amount to transfer bonds abroad and sell them in dollars.

With this "carrot," they seek to expand financial flows in the second half of the year, just when foreign trade, tourism, and the dollarization of retail portfolios ahead of the election could put pressure on the dollar. Some analysts and banks believe that the easing of restrictions could bring greater market volatility.