The country risk has fallen again and is now in 1,432 pointsExactly half of six months ago. The decline in this indicator reflects the sustained price increase shown by dollar bonds, which are only now managing to exceed the values shown on their debut after the debt swap carried out by the former minister Martin Guzman in September 2020.
The decrease in country risk also represents investors’ expectations regarding the economic roadmap what the government proposes Javier Milei and the fiscal results that the management of the Minister of Economy is showing so far, Luis Caputo.
Caputo’s plan must certainly provide for the increase in bonds to continue and that, in the end, the country risk becomes low enough to guarantee it undertake a voluntary refinancing of dollar debt maturities with private creditorswhether issued under national or foreign law, upon arrival of the exchange deadlines.
For now, the next July 9th The first installment of amortization of the capital of the exchange securities expires. For now we will have to pay them with dollar bills, because the interest rate is not expected to allow, at that moment, to be able to meet that deadline by delivering not dollars but new bonds. The interest rate would be too high.
These are not problems that other countries face region of. Uruguay has a country risk of less than 100 points; that of kilos approximately 138 points; In Peru it’s at 170; In Brazil and Paraguay slightly less than 200 points; In Colombia about 300 points. Ecuador, the country ofdollarization It is at similar levels to Argentina.
It is worth remembering that country risk is the additional interest rate, measured in basis points, paid by a dollar bond issued under US law, compared to a similar bond issued by the US Treasury. If US government bonds yield, for example, 4% per year, government bonds yield 100 “basis points”.
Central continues to make purchases
The liquidation of foreign currencies from export sectors and the restrictions still maintained due to the validity of inventories, allow the Central Bank to continue purchasing dollars and thus increase liquid reserves. This Friday he bought US$ 184 million dollars, So far in the new government, purchases have exceeded 10 billion and are already close to 0 of the net reserves, left at -12 billion dollars by the government of Alberto Fernández, Cristina Fernández and Sergio Massa.
At the end of the week, financial dollars remained calm: while the official dollar remained at $854, settled cash remained at $1,096 and the MEP dollar closed at $1,036.
Source: Clarin
