S&P Global Ratings downgraded Argentina’s credit rating to only three levels above defaultat a time when investors prepare for an imminent recession in an election year.
The country’s long-term foreign currency sovereign debt rating was lowered two steps, from “CCC+” to “CCC-”, according to a statement issued Wednesday. S&P also assigned a negative outlook, citing economic imbalances and the political uncertainty surrounding the 2023 elections.
It is the second downgrade of the nation’s credit rating in less than a week.after Fitch Ratings on Friday cut the country’s long-term foreign currency debt rating to “C,” one notch above default.
For Emmanuel Álvarez Agis, the IMF knows that it is not going to charge because Argentina does not have the necessary dollars
“Divisions across the political spectrum they limit the sovereign’s ability to implement timely changes in economic policy. The world capital markets are closed for Argentina,” wrote the S&P analysts led by Lisa Schineller. “The ongoing severe drought has exacerbated pressures in the already troubled currency market.”
S&P could further downgrade in the next six to twelve months, depending on the nation’s execution of an International Monetary Fund program, as well as the health of its banking system.
The agency confirmed its long-term local currency rating of “CCC-”.
Argentina’s dollar bonds due 2030 rose 1.4 cents on Wednesday to 28 cents, according to indicative price data compiled by Bloomberg.
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