payments, economic bill moves to Senate@ (Corrects typo in headline)
BUENOS AIRES, Dec 20 (Reuters) - Argentina's peso currency was slightly weaker on Friday, traders said, after the government said it would postpone payments on some short-term debt notes and as a sweeping bill of economic measures was expected to pass in the Senate.
The peso opened 0.29% lower at 59.99 per U.S. dollar, traders said, after the government said it would postpone the payments on short-term debt known as "Letes" until Aug. 31, 2020. Argentina's country risk rose 21 basis points to 1,950, the JP Morgan Emerging Markets Bond Index Plus showed.
Argentine dollar-denominated bonds were unchanged to down a point across the curve, with the benchmark January 2028 bond down 0.75 point to 43 cents according to Refinitiv data.
About $9 billion in "Letes" payments due to expire from Friday would be affected by the decree, according to a government source, as the new center-left administration of President Alberto Fernandez inherits a mounting economic crisis and prepares to renegotiate about $100 billion in debt with bondholders and other creditors including the International Monetary Fund.
Letes held by people or provinces would be exempt from the decree, the source said.
In August, the government of former President Mauricio Macri announced it wanted to extend maturities of short-term debt, and would negotiate new time periods for loans to be paid back to the IMF for its $57 billion financing package with Argentina.
The postponement of payments on Letes did not come as a surprise, according to Nikhil Sanghani, a London-based economist at Capital Economics, but longer-term concerns still linger for investors.
"The government has merely kicked the can down the road and maturity extensions alone will not be enough to resolve the debt problem. We think that it will have to pursue a large debt write-down next year," Sanghani said.
Meanwhile, Argentina's lower House earlier on Friday passed, after 20 hours of debate, the government's economic plan, which includes an array of tax increases on grains exports, personal property and foreign assets held abroad.
The Senate, where government-affiliated lawmakers hold a majority, is expected to pass the bill, dubbed the "Social Solidarity and Production Reactivation" project, as early as Friday evening.
Fernandez's economic bill, the cornerstone of his governing program, aims to maintain fiscal balance to guarantee the future payment of public debt and, at the same time, expand social spending to boost the economy as Argentina struggles with annual inflation over 50%, higher poverty and increased unemployment.
The Central Bank of Argentina on Thursday cut its benchmark interest rate to 58% from 63%, in a move to reactivate the stagnant economy. (Reporting by Walter Bianchi, Cassandra Garrison, Eliana Raszewski and Nicolas Misculin; Editing by Alison Williams and Steve Orlofsky)