Country BackgroundArgentina

Investor-Country ConferenceCairo, Egypt

March 26-27, 2010

Macro Economic data

2

After the collapse of the convertibilityregime, economic activity showed aremarkable recovery over the six-year periodbetween 2003 and 2008, growing at anaverage rate of 8.4% and accumulating a riseof 65.9% over the minimum in 2002.

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

IQ 9

4

IQ 9

5

IQ 9

6

IQ 9

7

IQ 9

8

IQ 9

9

IQ 0

0

IQ 0

1

IQ 0

2

IQ 0

3

IQ 0

4

IQ 0

5

IQ 0

6

IQ 0

7

IQ 0

8

IQ 0

9

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

Y.o.Y. change (left axis) GDP $93 (right axis)

Gross Domestic ProductConstant 1993 AR$ millions - seasonally adjusted

The national public sector primarysurplus, grew up after the 2002 crises. Whenrecovery finished it stabilized on 3%. Even inthe middle of 2008 international crises, thisvalue remained positive, and on similarvalues. The same thing happened with thepublic overall balance.

Macro Economic data

Feb-

10

The sustained growth brought arecomposition of the international reserves,that showed a strong upward slope until thebeginning of 2008 (maximum).

Since 2001, current account turnedpositive. The administered float Exchangerate policy sustained the economy'scompetitiveness.

Debt Market Snapshot

4

Indicators 2002 2003 2004 2005 (*) 2006 (*) 2007 (*) 2008 (*) 2009 (*)

Sovereign Debt 166,4% 138,7% 127,3% 73,9% 64,0% 56,1% 48,8% 49,8% EExternal Debt 95,3% 79,2% 74,3% 34,8% 26,3% 24,1% 18,6% 19,3% ETotal Services (**) (**) (**) 11,9% 10,5% 10,2% 8,1% 10,1% E

Debt average life 6,1 6,9 7,8 12,3 12,9 12,6 11,7 11,1

Debt in foreign currency 1154,8% 959,6% 736,2% 236,8% 222,2% 165,4% 165,3% 165,8%

External Debt 836,2% 722,5% 568,2% 217,0% 175,6% 134,6% 120,2% 118,7% E

Debt in foreign currency 415,1% 393,4% 362,8% 141,4% 130,4% 115,1% 93,4% 117,6%External Debt 300,6% 296,2% 280,0% 129,6% 103,1% 93,7% 67,9% 84,2% E

Interest paid (**) (**) (**) 8,5% 7,6% 8,1% 6,6% 8,0%Total Services (**) (**) (**) 52,2% 44,9% 40,8% 31,1% 37,0%

As % of Exports

As % of Tax Revenues

As % of International

Reserves

As % Of GDP

(*) Excluding untendered holdings of 2005 Debt Exchange.(**) Restructuring process.Source: Argentine Ministry of Economy and Public Finances

Debt ratios place Argentina in a solid solvency position compared with other LATAMcountries.Debt services represent 37% of total tax revenues and FX debt services represent only 53% ofFX-linked tax revenues.

Total Outstanding Debt as of December 31, 2009 (1)(2)

U$S 147.1 billion

By Type of instrument By Currency

(1) It does not include untendered holdings of 2005 Debt Exchange.

(2) Debt denominated in currencies other than US dollars has been converted into that currency using the exchange rates as of December 31, 2009

(ARG$/U$S=3.80).

Source: Argentine Ministry of Economy and Public Finances.

By Service Profile

Debt structure presents comfortable conditions, in terms of maturity, currency and type of creditor. The average maturity is over 11 years.

Only 35% of total debt is held by private creditors, representing only 17% of GDP.

Almost 50% of total debt is denominated in local currency.

Short-term debt10%

Bilateral Loans5%

Commercial Banks / Others

4%

Multilateral Loans11%

Guaranteed Loans

3%

Bonds67%

ARG$21%

CER-adjusted ARG$25%

U$S42%

Others2%Euro

10% 2010-201227%

2013-201939%

2020-20299%

2030-208925%

Sovereign Debt Structure

Financial Road Map

Take the necessary steps to advance in normalizing non-performing debt (Holdouts,Paris Club and other creditors).

Deepen measures aimed at improving reputation and consolidating conditions inorder to return to international financial markets.

Advance in converging to a sovereign funding structure with a bigger share of marketsources compared to public sector agencies.

Develop the local Debt Market launching a regular ARS securities Program

Goals

•Improve reputation and consolidate conditions to regain access to international financial markets.•Normalize the financial situation•Consolidate debt sustainability conditions•Balance the funding structure

Local Debt Program

Bi-weekly T-Bills and notes auctions in local currency, using fixed and floating(BADLAR) rate.

Complement the Central Bank experience constructing a local yield curve

Efforts will be concentrated in developing a 1 to 3 years fixed curve and liquidbenchmarks.

Generate an optimal distribution on payments and increase the liquidity of public debton capital markets.

We believe the infrastructure and incentives are set to attract Local and InternationalInvestors.

Further developing the local yield curve will allow Argentina to participate in theGEMX index

Investability Criteria

Argentine non – defaulted debt (B-) exceed the investability criteria (based in capitalcontrols and taxation, liquidity, efficiency, and regulations markets and infrastructure).

Argentina scored 51% weighting the six categories. Government is working in therelevant themes to improve the qualification, aiming at widening the investor base.

On one of the primary concerns, capital control, the finance department is evaluatingpros and cons of alternatives to the then introduced unremunerated reserverequirement such as a capital inflow tax. The decision will consider theoretical impacton liquidity, market confidence and short term foreign capital movements.Simultaneously, government is working on improving access to securities, money andderivative markets.

Market depth

Four types of securities are traded on local markets:

Treasury USD, ARS floating and inflation-linked Bonds

Central Bank fixed (Lebac) and Floating (Nobac) T-Bill and Notes

Before the crisis, monthly volume peaked USD 18 BN. Nowadays the average USD is 5 BN.

10 from 13 local currency bondsexceed USD 100 millions ofoutstanding amount, all withmaturity longer than 18 months.

As part of his liabilitymanagement initiatives, on 2009the Treasury began to issueFloating ARS bonds totalizing USD2,2 BN, with maturities longer than3 years.

Amount outstanding of total debt2006 - 2010

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

01-Ene-06

01-Jun-06

01-Nov-06

01-Abr-07

01-Sep-07

01-Feb-08

01-Jul-08

01-Dic-08

01-May-09

01-Oct-09

Million of USD

NobacsLebacsBonos en DólaresBonos en Pesos

Market Liquidity

The Repo market, long recognizedas a pillar of market liquidity, reachUSD 450 BN volume on 2009, andshow a consistent up-trend.

This helped to develop a liquidCentral Bank Fixed Yield curve withmaturity up to 600 days

Lebacs - Secondary market 5-3-2010

8%

10%

12%

14%

16%

18%

0 100 200 300 400 500 600 700

Based on the 4 criteria for liquidity and efficiency, Argentina has a good performance.The turnover ratio is growing up after the crises, and the Bid – Ask spread are tight for themost traded bonds.

Annual Repos volume 2004 - 2010

0

50.000100.000

150.000200.000

250.000300.000

350.000400.000

450.000

2004 2005 2006 2007 2008 2009 2010

Millions de USD

January and february

Consistent carry between ARS and USD

Looking at the Central Bankyields and the USD exchangerate annual rolling change,except for the 6 monthsfollowing the crisis, the carrywas positive for ARS position.

After the crises, the Badlarrate stabilized and converged tothe Central Bank policy rate.

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

01-Ago-04

17-Feb-05

05-Sep-05

24-Mar-06

10-Oct-06

28-Abr-07

14-Nov-07

01-Jun-08

18-Dic-08

06-Jul-09

22-Ene-10

Tasa

de

emis

ion

prim

aria

(LEB

AC

S e/

270

y 36

5 di

as)

Varia

cion

inte

ranu

al d

ólar

LebacsVariacion Dolar

Fluctuations of peso/dolar and Lebacs (from 270 to 365 days)2008 - 2009

Badlar and CB rates 2007 - 2010

0

5

10

15

20

25

30

10-Oct-06 28-Abr-07 14-Nov-07 01-Jun-08 18-Dic-08 06-Jul-09 22-Ene-10 10-Ago-10

%

Badlar Rate (private banks)Repo rate (1 day)

Hedge Markets

Badlar swap curves show anharmonious performance. Goingfrom 9,49% to 16,3% in 2 years.

Off shore (NDF) and Onshore (Rofex) curve arevery similar, on lowerlevels than past times,consistent with the actualmonetary policy.

Badlar swap curve

6

8

10

12

14

16

18

Mar-10 Jun-10 Sep-10 Dic-10 Mar-11 Jun-11 Sep-11

%

NDF and Dollar Future implicit Rate

4%

5%

6%

7%

8%

9%

10%

11%

12%

0 100 200 300 400 500 600 700 800Maturity days

RofexNDF

Concluding Remarks

Argentine local currency debt market has enough depth and liquidity to attract localand international investors.

It has a developed repo market and is improving the derivatives markets that allowinvestors to hedge risk without disrupting liquidity,

There are a wide distribution of maturities on time, although more securities areeither floating or inflation-linked, the next step is to consolidated the Treasury fixedlocal securities.

Capital controls were designed in view of macroprudential risk and not in view ofaffecting the local market investor base. Improvement will be considered, to reconcileboth objectives.

At present, the government is working on new measures to improve the capitalmarket, with the idea of leaving the local and international crises in the past, returningto the markets with a new and consolidated issue program.

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References

Secretary of Finance

Ministry of Economy and Public Finance

http://www.mecon.gov.ar/finanzas/

Republic of Argentina Central Bank

http://www.bcra.gov.ar

Local Market securities price information

http://www.mae.com.ar