Argentina’s credit rating was raised by Moody’s Ratings, which said the government’s efforts to stabilise its finances has decreased the likelihood it will renege on debt obligations.
The ratings company lifted the South American nation one notch to Caa3, the third-lowest level of junk and on par with Ecuador, Bolivia and Ethiopia, while raising the outlook to positive from stable, according to a statement on Friday.
The upgrade comes on the back of Argentina’s recovering economy, which has improved the country’s credit fundamentals over the past year. Moody’s cited President Javier Milei’s “effective and forceful policy adjustments.”
Wall Street has lauded efforts by Milei to bring dollars back into the country, reverse years of budget deficits and squash triple-digit inflation since taking office a little more than a year ago.
Still, Moody’s said there are risks as Milei approaches the “next phase” of his plan to overhaul the country’s economy, which will include removing capital and exchange controls.
“New challenges will emerge that could compromise progress made to date,” wrote Moody’s Jaime Reusche in the statement.
Argentina’s benchmark dollar bonds due in 2035 were little changed Friday, trading at some 67 cents on the dollar, according to pricing data compiled by Bloomberg.
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by Kevin Simauchi, Bloomberg
