Argentina's central bank, Banco Central de la República Argentina, has paid US$1 billion worth of debt contracted with two international banks in July, and has now cleared all debt with foreign banks from its balance sheet, the bank said in a Dec. 12 press release.

In January 2016, the bank borrowed US$5 billion as a liquidity buffer given the ongoing uncertainty in international markets. At that time, the bank's stock of foreign currency reserves had fallen to US$25 billion and the country faced important external payment challenges.

However, a more favorable global economic scenario for Argentina and the improvement in the central bank's balance sheet allowed it to reduce its foreign debt burden by 80% in July and obtain better financing conditions for new loans.

In addition, the bank's foreign currency reserves have risen by over US$12 billion since the beginning of 2016, which has allowed it to continue strengthening its balance sheet while giving it the flexibility to activate different mechanisms to face possible external shocks.