Argentina will use $2.3 billion of central bank reserves this year to meet payments to international financing organizations and on its official bilateral debt, according to the official gazette.
In exchange, the central bank will receive dollar- denominated, non-transferable 10-year Treasury notes that pay the same interest as the bank receives on international reserves up to a maximum of Libor minus one percentage point, the gazette said.
About $11.3 million of the $2.3 billion are to make up for payments that fell due last year that had been under-estimated, according to the gazette.
President Cristina Fernandez de Kirchner, unable to borrow from international markets since the country’s 2001 debt default, has used reserves since 2010 to pay international debt. The government plans to use about $8 billion this year from $5.7 billion last year, according to the budget law.
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