MercoPress. South Atlantic News Agency

Argentina's bonds slump after Milei's NYSE speech

Milei said Argentina would lift all exchange rate controls once zero percent inflation is achieved, which was not welcome in financial circles

Argentine bonds on Wall Street fell up to 3.6% on average Monday after President Javier Milei's speech before the New York Stock Exchange (NYSE), during which he announced that his government would release the currency exchange rate controls once zero percent inflation is achieved. During his speech on Monday, Milei also rang the traditional bell that starts stock market operations.

A similar trend was recorded in the Buenos Aires Stock Exchange where the leading index S&P Merval fell 1.8%. Meanwhile, the “blue” (a euphemism for “black market”) dollar remained stable at around AR$ 1,240.

In this scenario, the Libertarian administration issued a new emergency decree allowing itself to exchange debt securities without complying with the requirements set forth by the Financial Administration Law and without going through Congress.

In New York, Milei highlighted that his administration had “cut” all money issuance, and insisted that wholesale inflation stood at 2.1% per month. Hence, Economy Minister Luis Toto “Caputo will be remembered as the best Minister of Economy in history,” he argued.

Regarding his campaign promise to lift the exchange rate stocks, Milei explained that such a measure would be adopted once “the inflation induced by the program given by capital control disappears” because “they will not have bullets to load the weapons that can throw away the macroeconomic stability.”

“We will release the cepo when the inflation rate of the macroeconomic program is zero,” he underlined.

In Buenos Aires, Argentina's Central Bank (BCRA) bought U$S 21 million Monday in the Single and Free Foreign Exchange Market while some US$ 4,500 million entered the financial market through the Government's no-questions-asked program.