The country risk rises by 2% on Wednesday and reaches the 2007 basis points. The JP Morgan indicator measuring Argentina’s debt premium has not breached the 2,000 mark since early January.
In this wheel, Argentine bonds are again trading lower, with losses up to 4.5%, which explains the increase in country risk.
This performance continues to overshadow Economy Minister Sergio Massa’s target, which he announced four weeks ago that he would budget US$1,000 million to repurchase the debt in dollars to reduce country risk and make financing more accessible to Argentine companies.
It is that the level of country risk is what determines what the cost of borrowing would be for both Argentina and local companies that would like to obtain financing abroad. The indicator is calculated as a cost overrun over the US Treasury rate.
This implies that today they should face a rate higher than 20%, an unsustainable level which makes external financing impossible.
So far in February, country risk increased by 10.5%. Even so, it has performed well so far this year, as it accumulates a 9.3% decline after January’s jump.
So far the Government has allocated 600 million dollars to debt repurchases, without achieving a marked improvement in the price of bonds or reducing country risk.
The drop in the first month of the year is due to a sharp rebound in bonds, which recovered after the beating suffered in 2022. But for local and global reasons, that trend stopped in February.
This Wednesday, the stock that falls the most is the Global 46, with a 4.5% drop and an 11% loss for the month. Most Argentine dollar-denominated stocks are trading lower, down about 2%.
“In an unfavorable international context for emerging credit, sovereign bonds continue to experience a complex week marking his sixth consecutive day down. In this way, the globals deepen the reds and the monthly balance is already at -5.7% / -9%”, relaunched from Portfolio Personal Inversiones (PPI).
“The trend of Argentine debt in dollars is largely explained by the foreign component. The emerging universe, of which Argentina is a part, continues to suffer the consequences of the fear that the Federal Reserve will keep rates on a “higher for longer” path, and you can’t get up.”
US inflation for January was released on Tuesday, which at an annualized rate of 6.4% fell less than expected, suggesting the Fed will keep rates high for longer than expected. This encourages capital to position itself in the securities of the first world power, which works against the emerging countries
AQ
Source: Clarin
