Thursday, July 2nd 2026 - 08:02 UTC
Market analysts believe there could still be room for additional compression, though they warn it would be more limited
Argentina's country risk closed this week at 421 basis points, its lowest level in eight years, amid a strong recovery in dollar-denominated sovereign bonds driven by recent improvements in the country's credit rating. The indicator, compiled by the bank JP Morgan, reflects the premium Argentina must pay to borrow in dollars over US debt, considered risk-free.
The compression accelerated after the decisions by the agencies Fitch Ratings, in May, and Standard & Poor's, in June, to raise Argentina's sovereign rating to “B-,” leaving behind the category associated with a very high risk of default. The rating agencies attributed the improvement to fiscal adjustment, slowing inflation, the recovery of reserves and the government's greater capacity to refinance its maturities. Dollar-denominated debt securities gained more than 10% in the first half of the year. The market is now watching the payment of some $4.2 billion in principal and coupons on the Bonar bonds, scheduled for next week, and expects part of those funds to be reinvested, which could give a further boost to prices.
