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BCRA Repurchases Majority Of Financial Institutions’ Put Options

ARGENTINA
  • The BCRA successfully repurchased the majority of put options from financial institutions on Thursday, bringing the government closer to the lifting of currency controls. Bloomberg reports that private banks and other institutions resold ARS 13.2tn ($14.2bn) of put options stemming from sovereign peso bonds to the monetary authority, more than half of the ARS 20tn put options outstanding.
  • The BCRA said in a statement that the operation “significantly contributes to reducing uncertainty regarding the monetary program by eliminating one of the elements with the greatest potential of emission in the financial system”.
  • President Milei has said recently that eliminating the put options is one of the key steps needed before currency controls are lifted. Other requirements are the cleaning up of the BCRA’s balance sheet and bringing m/m inflation in line with the crawling FX peg, with Milei saying that he wanted that to be near 0% m/m.

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