Argentina debt management shapes fiscal policy

Economic analysis suggests that Argentina's fiscal and monetary policies under Economy Minister Luis Caputo and Central Bank President Santiago Bausili are structured to manage growing national debt. The strategy involves refinancing the 2023 fiscal deficit—estimated at 5.13% of GDP—through internal debt instruments, many of which are adjusted for inflation.

Key measures include the exchange of Central Bank liquidity notes (Leliq) and other liabilities, totaling approximately $32.76 billion, for National Treasury debt titles. To manage financial complexities, the government introduced the Fiscal Liquidity Letter (LeFi) via DNU 602/24, as well as LECAP and BONCAP instruments, which capitalize interest to address the challenges of high interest rates and consolidated debt.