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Echo Energy confirms no exposure to Argentine interest rate rise
Latin America-focussed upstream oil and gas company Echo Energy issued an update noting the current economic situation in Argentina, specifically the domestic interest rate that was recently increased to 40%, on Friday.
The AIM-traded firm confirmed that it did not hold Argentinian pesos, and that it had no borrowings linked to Argentinian domestic interest rates.
"The company's treasury policy is to hold all cash in sterling, dollars and euros, in amounts that cover the company's exposure to each of those currencies," the board said in its statement.
"All capital costs associated with the company's ongoing Argentinian work programme are priced in dollars and converted to pesos only as required at point of payment."
Similarly, Echo said sales were denominated in dollars and were only converted to pesos on receipt of funds.
"These receipts are used to pay local operating costs that are due in pesos, and, as a result, the company's exposure to the recent weakening of the Peso has been positive."