Optimism in the markets: Country risk drops below 600 points and the inflow of dollars accelerates
Optimism in the markets: Country risk drops below 600 points and the inflow of dollars accelerates
porEditorial Team
Argentina
Exchange rate stability, increased foreign currency inflows, and the momentum caused by Javier Milei's decisive legislative victory are consolidating an environment of growing confidence
Argentina's country risk broke through the floor of 600 basis points this Wednesday, a level not seen in years, confirming the renewed climate of confidence in the local economy following the legislative elections on October 26.
JP Morgan's indicator fell to 597 points, while sovereign bonds in dollars—both Bonares and Globales—rose by about 0.6% on average, accompanied by a sustained flow of investments and a reduction in financing costs for companies and public agencies.
Meanwhile, the foreign exchange market showed stable dynamics, with a wholesale dollar trading around $1,400, supported in part by the inflow of dollars from new corporate debt issuances and the recent placement by the City of Buenos Aires for USD 600 million at 8.125% per year.
According to analysts, this new scenario is a direct result of the macroeconomic reorganization undertaken by the libertarian government, combined with the greater perception of governability in Congress after La Libertad Avanza's resounding victory in the elections.
Companies take advantage of the financial window: more issuances and lower costs
Optimismo en los mercados: el Riesgo País perfora los 600 puntos y se acelera el ingreso de dólares
The downward trend in country risk triggered a strong activation of Negotiable Obligations (ON) placements. Companies such as YPF, TGS, Pampa Energía, Edenor, Pluspetrol, and Tecpetrol took advantage of the context to issue at lower rates, with higher demand and longer terms.
According to a report by Max Capital, more than half of the funds raised by companies will be used to cancel previous debt, while the rest will be allocated to imports and capital expenditures. This process not only improves corporate balance sheets, but—in the short term—also provides additional relief on the demand for dollars for foreign trade.
Meanwhile, BancTrust highlighted that greater confidence in the peso and the inflow of foreign currency from corporate borrowing help keep the dollar below the upper limit of the exchange rate band, even in a context of limited agricultural supply.
Milei consolidates political and fiscal support: signals that sustain the market's improvement
Optimismo en los mercados: el Riesgo País perfora los 600 puntos y se acelera el ingreso de dólares
The legislative victory of the ruling party strengthened expectations of continuity and deepening of the economic program. For investors, this result clears risks and opens the door for Argentina to return to international markets for financing in the short term.
In turn, the Government recently signed a strategic agreement with the United States to boost bilateral trade, a gesture aligned with pro-Western diplomacy that strengthened the business climate and the bilateral relationship.
In fiscal matters, the Ministry of Economy reported that the primary surplus for October was 0.1% of GDP, reaching 22 consecutive months of positive results. Reuters noted that, after the elections, fiscal risks linked to the parliamentary situation were reduced, leaving the Government in a better position to meet the annual target of 1.6% of GDP.
Looking ahead to the long weekend—with banks closed on Friday and Monday, and the stock market operating partially—investors are adjusting their portfolios, but in a climate that has consolidated as the best of the year for Argentine assets.
