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Access to Forex Market for MSMEs to Pay Commercial Debts Abroad

The Central Bank of the Republic of Argentina (BCRA) and the Secretariat of Trade have announced a new measure that will allow micro-, small-, and medium-sized enterprises (MSMEs) to access the forex market for paying their commercial debts owed abroad. This initiative aims to alleviate the burden on MSMEs by providing them with the necessary resources to settle their debts and resume their business operations.

The decision to implement this measure was based on several key factors. Firstly, the completion of the registry of foreign commercial debts enabled a clear understanding of the outstanding debt situation left by the previous government. This registry revealed a total net debt of USD42,600 million, with around USD8,500 million already paid through means other than the forex market. This comprehensive analysis of the debt situation highlighted the urgent need to address the financial challenges faced by MSMEs.

Recognizing the critical role of MSMEs in the economy, the Secretariat of Trade and the BCRA have made concerted efforts to provide relief to these enterprises. The measure will benefit approximately 10,000 MSMEs, with more than 80% of total MSMEs and over 70% of those recorded in the registry being eligible for assistance. This support will be particularly significant for micro-enterprises, which make up the majority of the beneficiaries.

The implementation of this measure will be carried out in stages over the next three months. Starting from February 10, MSMEs with debts recorded for up to USD500,000 will have access to the forex market for an amount of up to USD50,000. This initial phase will provide immediate relief to MSMEs, enabling them to settle a portion of their debts. Subsequently, from March 10, an additional amount of USD100,000 will be made available to these enterprises. Finally, from April 10, the remaining amount of the recorded debt can be settled through access to the forex market.

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For MSMEs with commercial debts exceeding USD500,000, priority will be given to participate in the bidding process for BOPREAL Series 2 short-term bonds. These bonds will have amortization flows in dollars between July 2024 and June 2025. The maximum amount available for BOPREAL Series 2 is USD2,000 million (NV), while BOPREAL Series 3 has a maximum amount of USD3,000 million (NV). The calls for bids will be conducted in February, providing an opportunity for these enterprises to secure additional financial support.

In addition to this measure, the recent auction of BOPREAL Series 1 saw a record number of 690 enterprises participating, with awards totaling USD2,454 million (NV). The aggregate amount subscribed to BOPREAL Series 1 to date stands at USD4,096 million (NV), leaving USD904 million (NV) available for future auctions. This successful auction demonstrates the positive response and demand for these bonds, further highlighting the potential benefits for MSMEs.

The introduction of this measure to allow MSMEs access to the forex market for debt repayment is a significant step in supporting the recovery and growth of these enterprises. By easing their financial burden, MSMEs can focus on revitalizing their operations and contributing to the overall economic development of Argentina. The BCRA and the Secretariat of Trade’s commitment to addressing the challenges faced by MSMEs is commendable, and this measure will undoubtedly provide much-needed relief to these enterprises.

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