Argentina’s risk premium, which shows the bond yield differential versus comparable US debt and is a measure of investment exposure, fell to 752 basis points on Tuesday, its lowest level since April 2019.
The sharp drop in Argentina’s risk premium, a measure of investment exposure, is crucial for the country’s access to international credit. A year ago, in the last months of the center-left Peronist government of Alberto Fernández, this indicator It was around 2,500 points.
The index has trended downwards since Milei took power in December 2023with harsh austerity measures and pro-market reforms that have helped reverse a deep-seated fiscal deficit and improve state finances.
Milei’s cost-cutting agenda has increased poverty and harmed economic growthalthough it translates into a record bond parity, maximums on the Buenos Aires Stock Exchange and the recovery of the central bank’s reserves.
Milei’s good relationship with US President-elect Donald Trump is likely to help the government achieve a trade agreement with the North American countryaccording to local investment firm Wise Capital.
“We are exterminating inflation”Milei said at a public event last week, although consumers continue to feel pressured by one of the highest inflation rates in the world.
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