“Argentina is now in a position to access the capital markets,” President Javier Millay assured, defending the government’s economic policies and stressing that the country is undergoing a process of fiscal normalization, which, as he said, is beginning to be recognized by investors.
Mr Millais argued that one of the key elements of ‘climate change’ is compliance with financial obligations. “We intend to fulfill our obligations and we intend to honor them as we have always done,” he said. He also highlighted that “Argentina’s debt has fallen by $50 billion” since taking office, a figure he said has contributed to improved perceptions of Argentina’s solvency.
He said there has been more movement in the private placement market, with “a lot of private placements going on for 12 years at an average interest rate of 8.5%.” For the president, these operations confirm the idea that Argentina is once again in a position to finance itself. However, he believed that some investors remain in a “waiting period” as they wait for a definition in the next special session of Congress.
The President linked progress on country risk to progress on the budget and ultimately establishing zero deficit as national policy. If Congress supports this fiscal framework, he said, “sooner or later the country will be less risky.” Along these lines, he emphasized that all branches of government are coordinating spending with the Ministry of Economy, which is responsible for maintaining fiscal balance.
Millais also developed his position on interest rates, questioning what he defined as the “historical conceptual error” of considering interest rates only as the price of money. He explained that this should be interpreted as “the relative price of the commodity now and in the future.” From that perspective, he argued that Kirchnerism was “capital-consuming” and worsened long-term expectations, which artificially increased the country’s risks compared to the United States.
Debt renewal and reform
Regarding public loans, the president said he does not expect it to be difficult to renew maturities. “We believe there will be no problem with debt repayments,” he said, attributing this outlook to the fiscal balance his government maintains. He even foresees a potential surplus in demand for future positions, saying, “If you want to get into fixed income, Argentina is a great business opportunity.”
Milley pinned that hope on a reform package the executive branch will send to Congress, including labor and tax changes and criminal code amendments. He thought the approval would have a “very important impact on country risk” and facilitate cheaper financing.
Central banks and monetary policy
The President also reviewed the central bank’s debt situation. He recalled that during the Federico Starzenegger administration, it reached $120 billion, and after various crises it ranged from $350 million to $450 million. He asserted that the government had dismantled LEFI to avoid significant financial expansion, and that the current debt amounted to approximately $25 billion. “The economy is barely monetized,” he said, noting that dollars can therefore only be purchased for genuine money demand.
exchange expectations with the band
Millais also defended the exchange rate band system, defining it as a means to adjust expectations in situations where exchange rates serve as a benchmark for inflation. He argued that monetary policy needs to take this action into account in order to maintain economic planning.
Finally, he said the government will maintain a course based on zero deficit, financial order and gradual opening of the exchange rate system. He reiterated that under this plan Argentina has already demonstrated the necessary conditions to restore access to international credit, and that the reduction in country risk will be a direct result of maintaining fiscal discipline and promoting structural reforms.
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