Argentina borrows $147 mln from tax agency

BUENOS AIRES, Sept 3 (Reuters) - Argentina's government said on Wednesday it had sold 450 million pesos ($147 million) in short-term paper to the state tax agency, part of its strategy to meet 2008 funding needs without tapping markets.

The government said in the official gazette that the 180-day bills pay 10.4 percent annual interest and are not negotiable on markets.

It is the second time in less than a month that the government has borrowed from the tax agency AFIP. In mid-August, it sold 250 million pesos in debt to AFIP with an interest rate of 9.9 percent.

Argentina has said it can meet its debt obligations this year without going to the markets, but concern has grown over its financial outlook since it sold $1 billion in bonds to Venezuela in early August at a high yield of 14.8 percent.

President Cristina Fernandez, who had already launched a debt buyback program to calm markets, announced on Tuesday she would pay back $6.7 billion in defaulted debt to the Paris Club group of creditor nations.

Yields on Argentina's foreign-currency-denominated bonds widened by 1 basis point early on Wednesday to 679 basis points over U.S. Treasuries, according to JPMorgan's Emerging Markets Bond Index Plus (EMBI+) 11EMJ .JPMEMBIPLUS. ($1 = 3.0625 pesos) (Reporting by Walter Bianchi; Writing by Helen Popper; Editing by Jonathan Oatis)