BUENOS AIRES, Feb 2 (Reuters) - Argentina has no plans to return to international capital markets despite a sharp fall in sovereign yield spreads, Economy Minister Luis Caputo said on Monday, playing down investor speculation that the improving indicators could pave the way for new external financing.
"We have no intention of going to the international market," Caputo said in an interview with a local radio station.
Recent dollar purchases by the central bank has stabilized markets and helped push
the country's so-called risk index below 500 points in line with the government's economic plan.
As Argentina pays down debt, he added, investors receiving those dollars are seeking to reinvest them in Argentine assets rather than exit the market.
The drop in country risk, the premium investors demand for holding Argentine debt over comparable U.S. Treasuries, had fueled expectations of potential for new external debt financing. Some analysts pointed to Ecuador's recent return to international debt issuance and drew parallels between the two economies.
President Javier Milei said later on Monday in a post on X that Argentina's debt strategy is aimed at limiting the supply of sovereign bonds while shoring up investor confidence, as the government seeks to drive down borrowing costs.
Payments to multilateral lenders would be met through the sale of state assets, while a zero‑deficit policy ensures interest payments are covered and, at worst, existing debt is rolled over, he said. The government will continue to look for alternative funding sources to avoid fresh issuance.
The approach, Milei said, will keep bond supply from growing even as demand rises, pushing prices higher and lowering yields and country risk.
"A non‑growing supply of bonds combined with growing demand implies higher prices for Argentine bonds and therefore lower interest rates," Milei said, adding that improving fundamentals would reinforce that dynamic.
(Reporting by Walter Bianchi, writing by Cassandra Garrison; Editing by Cynthia Osterman)
