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Bond Market News
Argentina Deliberates Managed Exchange Rate in 2025; Economy Grows by 3.9% in Q3
December 17, 2024
Argentina’s economy grew by 3.9% QoQ in the third quarter of 2024. This was its first QoQ expansion since facing a technical recession that began in late-2023. However, GDP still contracted by 2.1% compared to the same period in 2023, continuing its sixth consecutive yearly decline. The economic slowdown has been attributed to the austerity measures, including social spending cuts, public sector layoffs, and high inflation, which remains at 166%. Also, Argentina is said to be deliberating whether to introduce a managed exchange rate regime (dirty float) in 2025. Argentina has been restricting forex and capital market operations for the past five years, with exporters having been made to sell their dollars. The currency controls are also said to have prevented companies from sending dividends abroad and also restricted individuals from buying foreign currency.
Argentina’s dollar bonds have been among the top sovereign gainers this year – for instance, its 5% 2038s have risen 75% YTD to 69.6 cents on the dollar, yielding 7.7%.
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