Argentina will use part of the central bank's fiscal surplus to pay bond interest.

Argentina's Ministry of Economy announced on hycm Industrial Bank foreign exchange official websiteSunday that it will purchase over $1.5 billion from the Central Bank to pay the full interest on the "Globales" and "Bonares" bonds due in January 2025.

The Ministry of Economy stated in a press release that this operation will use part of the fiscal surplus achieved in the first half of the year, which by May had accumulated to 2.3 trillion Argentine pesos (approximately $2.5 billion).

The Ministry added that the $1.528 billion will be deposited in a trust account at a New York bank and will be used solely to pay the interest on these bonds.

This announcement came a day after the liberal President Javier Milei's government proposed a plan to halt the expansion of the monetary base to tackle the nearly 300% annual inflation rate.

Milei, a free-market economist, has implemented sometimes painful austerity measures since taking office, cutting state spending, and promising to rebuild the country’s depleted foreign exchange reserves.

In the initial months of Milei's administration, the Central Bank made significant purchases of dollars. The bank needs dollars to repay creditors.

The accumulation of reserves is crucial for restoring economic and financial stability after years of crisis and is essential for the government to fulfill its promise to lift harsh monetary controls that hinder business and trade.

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