Argentina stops selling dollar bonds on the domestic market for two months due to a sharp rise in borrowing costs. Bonar bond yields exceeded 12%.
Argentina has suspended the placement of dollar bonds on the domestic market for two months. This is the longest pause since the launch of the program in February.
The reason was a sharp increase in borrowing costs. Yields on Bonar dollar bonds rose by more than 500 basis points and exceeded 12%. The authorities were forced to halt new issues. High borrowing costs on international markets for the first time prevented the country from placing bonds abroad.
Earlier the government planned to raise almost 1 billion dollars on the domestic market this year and an additional 5 billion dollars in 2027. Economy Minister Luis Caputo said the authorities still intend to place local bonds next year. If domestic placements are impossible a currency swap with China may be used.
Next year Argentina will have to pay about 25 billion dollars of debt in hard currency. This is part of the payment schedule calculated until 2030. The strategy for fulfilling obligations without entering global debt markets includes buying dollars by the central bank privatization of state assets multilateral financing and placement of bonds on the domestic market.
Economic growth in the country has stalled. Inflation remains high and concerns about unemployment are growing. Ahead of next year's elections uncertainty persists. The pro-market course of President Javier Milei may be under threat.