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LatinNews Daily - 26 October 2022

In brief: Moody’s urges Argentina to boost foreign currency reserves

*The local media has published excerpts of a report by international credit ratings agency Moody’s which warns that the decision by Argentina’s central bank (BCRA) to continue to restrict companies’ access to US dollars for the payment of debt negatively affects corporate debt. According to these excerpts, Moody’s notes that BCRA recently extended until the end of 2023 a rule that was to expire next December which establishes that companies must restructure 60% of debt maturities in foreign currency and that they only have access to the foreign exchange market to pay 40% of their maturities. According to Moody’s, these restrictions “significantly limit the financing options” of companies and may force many with foreign currency-denominated debt to resort to a forced debt swap. These restrictions, according to the rating agency, reflect the need of the BCRA to increase its “very low US dollar reserves” and comply with the requirements of the Extended Fund Facility (EFF) agreement signed by Argentina with the International Monetary Fund (IMF) last March, which establishes among its goals to increase its foreign currency reserves to US$5.8bn this year.

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