The BCRA has arranged a reverse repurchase agreement (reverse repo) with six leading international banks using part of its BONARES 2035 and 2038 holdings. This transaction is part of a set of measures implemented by the BCRA since the beginning of this administration in order to strengthen Argentina’s international reserves.
The transaction was made for the total auctioned amount—USD3 billion—for a term of 372 days. The BCRA will pay an interest rate equal to SOFR in US dollars plus an average spread of 400 basis points, which is equal to an annual rate of 7.4%.
This time, the BCRA received bids for USD4.4 billion, in excess of the amount auctioned by about 50%. Despite the high demand and taking into account the projections of strengthened international reserves, the BCRA decided not to increase the amount awarded.
The strong interest shown by major international banks reinforces the process to normalize access to credit markets, in line with the fall in country risk and the consistent and sustainable macroeconomic setting.
This new repo ratifies the BCRA’s ability to access financing instruments at market conditions and to efficiently manage its foreign currency liquidity, reinforcing its balance sheet and Argentina’s international reserves position.
