Argentine businesses and investors are paying a premium to stock up on dollars in a creative effort to sidestep President Javier Milei’s currency controls.
Although individuals face fewer restrictions today, companies still confront barriers around buying and selling greenbacks as Milei tries to prevent major swings in the peso. To get around the controls, firms are buying short-term corporate, provincial and sovereign bonds using pesos to receive coupon and principal payments in dollars.
The surge in demand has reduced yields so much that some of Argentina’s locally issued corporate and provincial dollar bonds come with lower borrowing costs than benchmark US Treasury bonds.
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