The financial rating agency S&P maintained this Friday the note of the long-term debt of Argentina in CCC+with a stable outlook, after the success of a swap of local debt in bonds linked to the dollar or to inflation.
The swap of these bonds maturing from June to September 2023 was made to reduce the maturities in pesos for the next three months, S&P said in a statement.
It is part of the strategy of the new Minister of Economy, Serge Massato stabilize conditions in local financial markets, especially the exchange rate.
At the same time, the minister intends to apply measures aimed at meeting the goal of fiscal deficit this year, as required by the International Monetary Fund (IMF).
Under the agreement with the IMF Renegotiated this year by Argentina for 44.5 billion dollars, the country is committed to reducing the fiscal deficit from 3% of the Gross Domestic Product registered in 2021 to 2.5% of GDP in 2022, 1.9% in 2023 and 0.9% in 2024.
“We affirm our CCC+ long-term ratings for Argentina,” the agency said.
The stable outlook “reflects challenges in managing economic imbalances amid disagreement over policy execution within the ruling coalition” ahead of the 2023 elections, the statement said.
According to the agency, it is also because financing in local markets is “limited.”
CCC+ it is a low rating, a reflection of very poor credit quality and the possibility of some type of default.
In Argentina poverty affected 37% of the population in 2021 and it is estimated that the percentage will rise to 40% this year. In July, inflation was 7.4%, the highest monthly index in 20 years, for a price increase of 46.2% so far this year.
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