United States Virginia change
Sri Lanka Breaking News
Sri Lanka parliament
vivalankaSri Lanka newsSri Lanka businessSri Lanka sportsSri Lanka technologySri Lanka travelSri Lanka videosSri Lanka eventssinhala newstamil newsSri Lanka business directory
vivalanka advertising
Menu
Stay Connected
facebooktwittermobile
Popular Searches
T20 World Cup
Sponsored Links
Sri Lanka Explorer

Argentina to pay debt with reserves in 2012-reports

Sep 18, 2011 2:30:51 PM - www.ft.lk

 (Reuters) – Argentina’s government plans to use foreign currency reserves again next year to pay off a portion of its debt, Pagina 12 newspaper reported on Friday, citing Deputy Economy Minister Roberto Feletti.
The government submitted its 2012 budget bill to Congress late on Thursday but journalists had no access to the text.

The bill was expected to include authorization for the use of central bank reserves for a third straight year, even as “excess” reserves available for this use shrink and concerns over the global economy intensify.
Feletti “confirmed that the national government will resort again to the use of the central bank’s foreign reserves to pay a portion of the dollar debts owed to the private sector,” Pagina 12 said, without mentioning a specific dollar amount.
Ambito Financiero reported the government would use up to $7.5 billion in reserves in 2012 — as was stipulated for 2011 — while BAE newspaper said the amount would be smaller.
In fact, Argentina’s excess reserves, which surpass the amount needed to back the country’s monetary base, fell to $5.9 billion in late August from $11.2 billion in January.
This reflects the use of reserves to pay debt this year, a monetary base that is expanding nearly 40 percent year-on-year, increasing capital flight and a shrinking trade surplus. So while the inclusion of the use of reserves in the budget bill gives the government the option of tapping these funds, it will have to line up other financing sources to cover its obligations in 2012.
Local media reported the government could rely again on loans from within the public sector, particularly from the Anses state pensions agency.
And it could also issue debt on local or international markets, particularly to seek financing for infrastructure. BAE newspaper reported the government could try to raise between $1 billion and $2 billion for that purpose.
State news agency Telam quoted unnamed Economy Ministry sources as saying the government’s debt obligations would total some $6.8 billion next year.
It added that the bill envisioned growth of about 5 percent, inflation of no more than 9 percent and a primary budget surplus of 3 percent of gross domestic product (GDP).
Argentina has stayed clear of global credit markets since staging a roughly $100 billion sovereign debt default in 2002. Finance Secretary Hernan Lorenzino said recently market financing was an option for Argentina, not a necessity.

Business: (Latest Stories)