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Argentina’s Risk Gauge Drops to Seven-Year Low as Bonds Rally and Reserves Rebuild

Stronger sentiment follows central-bank dollar purchases, with negative net reserves tempering the outlook.

Overview

  • JP Morgan’s riesgo país fell as low as 527–543 basis points, the lowest since June 2018, after several sessions of gains in dollar sovereign bonds on Wall Street.
  • The Central Bank bought about US$978 million over 15 sessions, including US$75 million on Thursday, lifting gross reserves to roughly US$45.6 billion.
  • Net international reserves remain around negative US$3.5 billion, a gap that leaves Argentina exposed to external shocks despite improving market metrics.
  • Private dollar inflows supported the move, with strong corporate issuance such as YPF’s US$550 million bond, an estimated US$3.6 billion still to be settled, and eased rules for firms to prepay external debt if they refinance.
  • With financing costs lower, officials are studying interest-rate cuts and say voluntary refinancing in global markets could follow if the trend consolidates, helped by policy signals including President Milei’s plan reaffirmed in Davos.