Argentina’s country risk rose to 2,219 points, the highest level in 22 months. With the local market inactive due to the Flag Day holiday, this key indicator continues to rise as a reflection of the price of Argentine bonds abroad.
The JP Morgan indicator that measures the overrate faced by Argentine debt in relation to United States Treasury bonds rose 1.3%. It is the highest level since August 2, 2020, a month before the debt swap. Argentine bonds are trading almost all in the red, with declines of around 1%.
In Argentina, the rise in country risk reflects the uncertainty of investors in the midst of escalating inflation and the Government’s difficulties in meeting the goals set forth in the agreement with the Monetary Fund. Country risk has already been above 2,000 basis points for twelve days.
When the debt swap was sealed in September 2020, it was expected that with the issuance of the new titles, the indicator would settle below 1,000 points. Although after the swap the country risk fell rapidly to the 1,300 point zone, a few days later it climbed again and in recent weeks it has not stopped climbing.
These levels of country risk prevent the Government from placing debt abroad. In this way, it has no other alternative than to finance itself in the domestic market with placements in pesos, mostly tied to inflation.