Fitch sees the risk of default and evaluates the change in Argentina’s credit rating

The worsening of the financial crisis in recent weeks and the high uncertainty experienced by the Argentine economy it could lead the rating agency Fitch to further lower the country’s rating by the end of the year. the credit office It has already put long-term dollar sovereign debt at risk of default and has analyzed pesos bonds for the same risk.

Argentina had already qualified with the CCC category, one of the lowest for public debt securities in terms of credit profile. Now, the financial agency has changed its qualification criteria as well introduced the notes CCC + and CCC-. All CCC-rated countries will be analyzed over the next six months and may go up or down a notch after that.

Although Fitch avoids anticipating what the verdict will be after this observation time, Todd Martínez, Sovereigns Group’s deputy chief for the Americas, said in a dialogue with Bloomberg Line, that theThe goals agreed with the IMF are in doubt, then the risk of default grows: “It seems that Argentina has enough difficulty in achieving these relatively unambitious goals,” he said.

And in this sense he added: “All this indicates a scenario in which it seems that it will happen it will be very difficult for Argentina to achieve the fiscal consolidation it needs and add international reserves you have to avoid another credit event.

Regarding the announcements made by Minister Silvina Batakis to reassure the market, Martínez specified: “Given the reaction that is seen in bond prices and in the exchange rates of the parallel market, Those announcements don’t seem to have convinced the markets yet. ”

In this sense, the executive added: “The rising parallel exchange rates is something that could exacerbate macroeconomic imbalances Argentina and hinder the accumulation of reserves in a sustainable way, when people see an exchange rate more favorable than the official one. ”

“Our CCC rating says we see another default as a real possibility. The category below is where we start to say that this is our base case and that we see it as probable. So we’re not seeing it yet, but the markets are looking ahead of us. Our rating horizon is a few years, “he said when asked about the dollar bond price.

The currency debt, already restructured by Guzmán in 2020, accumulates drops of almost 17%. For Martínez, these contributions “send a very negative verdict on the path that Argentina is taking to be able to make these payments, without avoiding any kind of restructuring”.

YN