The drop occurred after a new increase in sovereign bonds
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During today's trading session, the country risk fell to 527 basis points, the lowest level recorded in the last seven and a half years. The drop occurred after a new rise in sovereign bonds, which accumulated three consecutive days of gains on Wall Street.
The indicator, which measures the additional cost that Argentina must pay to access external financing, had not been at these levels since June 2018. The trend reflects renewed interest in government securities, confidence in Javier Milei's administration, and a context of greater stability in the markets in recent days.
Luis Caputo y Santiago Bausili.
This Friday, Treasury bonds traded with gains close to 1%, consolidating a positive streak that drove the decline in country risk. This movement has a direct impact on the cost of financing, since a reduction in the indicator makes borrowing cheaper for the national government as well as for companies and provinces that seek to access the international market.
Consultancy firm LCG analyzed the behavior of the indicator and linked it to the exchange rate front. After the close of trading, they stated: "Country risk falling below 550 points, surely linked to the accumulation of reserves, indicates that we are approaching a situation that allows for better management of the flow of dollars".
Along the same lines, consultancy firm Outlier highlighted the performance of sovereign bonds in dollars and associated it with the Central Bank's dynamics. In a report released on Friday morning, they stated: "Sovereign bonds in dollars rose (...) probably due to the continued reserve purchases by the BCRA on an ongoing basis".
Javier Milei y Luis Caputo.
They also emphasized that "Global bonds rose, even with the risk-free rate moving upward during the session, highlighting their strong performance".
This way, the drop in country risk to lows not seen since 2018 marks a relevant data point within the current financial context and consolidates a favorable trend for Argentine bonds, which in recent sessions have managed to sustain a recovery supported by both local and international factors.
