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Bond Market News
Argentina Upgraded to CCC by Fitch
November 18, 2024
Argentina was upgraded by a notch to CCC from CC by Fitch. The upgrade comes on the back of improvements in the sovereign’s ability to meet its foreign-currency bond payments without seeking debt relief. This comes as dollar inflows from a successful tax amnesty have bolstered Argentina’s international reserves. The tax amnesty has already attracted over $20bn into the economy, resulting in $3.6bn in reserve gains since July which has helped reduce the gap between the official and parallel exchange rates, improving the BCRA’s ability to maintain a crawling exchange rate. Argentina’s authorities are exploring external financing options, including a potential $2.7bn repo line with foreign commercial banks, however, challenges remain with policy disagreements with the IMF and upcoming US political shifts. Despite this, significant risks remain, with low reserves largely tied up in a non-usable China swap and gold and uncertain prospects for sustainable monetary and exchange rate policies.
Argentina’s bonds traded slightly positive with its 4.125% 2035s up at 63, yielding 12.07%
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