The Ministry of Economy requested authorization from the U.S. Securities and Exchange Commission (SEC) to publicly offer the first tranche of Argentina’s debt, for the restructuring issued under foreign law of $30.5 billion, through Resolution 130/2020 published today in the Official Gazette. The total proposed restructuring is almost $69 billion.
In January, the number of title transfers of properties registered a decrease of 31.4% compared to the same month last year and reached its twentieth consecutive month with a drop in the year-on-year measurement, according to the Notary Public Association of Buenos Aires.
The price gap of agricultural products between what the consumer pays and what the producer receives dropped by an average of 7.3% in February, according to the Argentine Confederation of Medium-sized Enterprises (CAME). Consumers paid 4.7 times more than what producers charged for products in their fields. The agricultural Price Index at Origin and Destination (IPOD) fell 9.4% in February and was the main driver in improving the indicator. The gap for these products averaged 4.9 times, 12.4% below the same month last year.
Argentina’s economy would fall by 2% or more by 2020 if travel restrictions/quarantine deepened. The economic impact of the coronavirus at the local level affects exports. Declining demand in some of Argentina’s major trading partners, such as the United States and China, coupled with falling commodity prices and declining tourism, will result in lower foreign exchange earnings. In contrast, inflation expected to fall from 37.5% to 35%.
Loans in United States dollars fell by 38.9% year-on-year in February; the principal reduction is in commercial loans, which accounted for 75.4% of the total. Credit card financing also recorded a sharp year-on-year decline of 43.5%. The higher exchange rate applicable to the repayment of these operations has acted as a deterrent to the use of plastic abroad.
Banco Santander Argentina will launch today a line of new loans for SMEs at an annual rate of 20% for a total amount of one billion pesos ($15.9 mn) and a term of up to 24 months. The maximum amount per customer is 3 million pesos ($47,672). The bank will help to mitigate the impact of containment measures to protect the population from the spread of coronavirus may have on the economy and the normal functioning of the business. Also, affected companies will have more flexibility in managing their cash flow.