The rating agency Fitch Ratings anticipated that it could soon improve Argentina's sovereign debt rating, following the Government's announcement by Javier Milei about the lifting of the currency control and the agreement with the International Monetary Fund (IMF).
Currently, Argentina's long-term dollar bonds hold a CCC rating since November 15, just above the lowest levels: CC and C, which precede selective default.
"Argentina's currency policy reform and the new program with the IMF offer a clearer path toward reserve accumulation and a potential recovery of market access, which could improve the sovereign rating of CCC," Fitch noted in a recent report.
Javier Milei, presidente de Argentina.
The analysis also highlights that "greater exchange rate flexibility should only temporarily affect Argentina's economic recovery and disinflation," while emphasizing that "the authorities are now better positioned to manage this transition than in the past."
Fitch Ratings highlighted that "Milei's program showed results last year," achieving a primary fiscal surplus of 1.8% of GDP, which allowed the elimination of monetary issuance by the Central Bank (BCRA) as a means of financing.
The improvement in Argentina's credit rating to CCC from CC in November 2024 reflected an increase in confidence from Fitch regarding Milei's Government's ability to meet its debt commitments without needing to request restructurings or relief, although obstacles such as the low level of international reserves and the lack of access to external financing persist.
The agency explained that annual dollar debt payments—both in interest and principal—reach 8.6 billion dollars in 2025 (half was already paid in January and the rest will be due in July), and in the coming years will exceed 11 billion dollars.
La agencia calificadora Fitch Ratings.
"An additional improvement in the rating will depend on our confidence in the future accumulation of international reserves and a recovery of market access, both necessary elements to make those payments comfortably," the analysts indicated.
In that sense, Fitch expressed: "We expect the new exchange rate regime and the IMF program to improve conditions for reserve accumulation. They could also improve market access, although this could depend on the outcome of the midterm elections and the message that result conveys regarding the support and sustainability of the new political direction."
It should be noted, however, that President Milei himself stated that, for now, the Central Bank will only intervene in the purchase of foreign currency if the official exchange rate approaches the floor or ceiling of the floating band, set at 1,000 and 1,400 pesos per dollar.
