The risk rating agency Moody’s decided to maintain the “Ca” note for Argentine sovereign bonds in local and foreign currency, as well as its “stable” outlook, reported this Wednesday in a statement.
The entity highlighted the “recent efforts to correct the macroeconomic imbalances within the framework of the International Monetary Fund (IMF) program that was approved earlier this year”.
However, it was decided to maintain the same rating before “limited access to credit, weak governance and a history of recurring debt restructurings”.
Meanwhile, the “stable” outlook was maintained; which implies that for Moody’s credit conditions in general are unlikely to “improve materially”.
Similarly, “expected losses remain in line with those associated with a Ca rating,” the agency explained.
The inflation problem
Also, he rated inflation as a “perennial” problem, and projected that the index will total 85% this year and 80% in the next.
Regarding reserves, the rating agency highlighted that the same rose by US$ 1,000 million since the beginning of the month “after the announcement by the Government where more favorable conditions were granted to certain exporters”, in reference to the so-called “soybean dollar”.
In this way, the total number of reserves, according to Moody´s, reached US$ 37,600 million, although he noted that net reserves are “less than US$2 billion” if “certain private sector deposits, currency swaps and other bilateral loans” are removed.
Moody’s called inflation a “perennial” problem and projected the index to total 85% this year and 80% next year.
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Argentina maintains the Ca classification since April 2020at the beginning of the Coronavirus pandemic, at which time the agency assigned a “negative” outlook, which was raised to “stable” in September 2020 after the public debt swap under foreign law.
Previously, in August 2019, after the decision of the Mauricio Macri administration to declare the granting of payments of short-term securities in pesos, the rating agency lowered the grade from “B2” to “Caa2”.
