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Argentina’s sovereign risk premium has fallen to its lowest levels since July 2018 at 557bp, as per a JPMorgan Index. In comparison, the level stood at nearly 1400bp prior to the elections in September. This comes following positive sentiment after President Javier Milei’s recent election victory in October. His government announced last month that it was loosening currency-trading restrictions and planning to buy as much as $17bn in reserves throughout 2026. Besides, Argentina plans to cut spending, reduce taxes, and fix the country’s currency rules. Also, the government is preparing to sell international bonds for the first time since 2020. While analysts note that the outlook is positive, they also warn that the window of opportunity might be narrow, noting that Milei must successfully pass his reforms through Congress and manage inflation while keeping the currency stable.
Argentina’s dollar bonds were trading stable with its 5% 2038s at 77.8, yielding 6.6%.
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