The defeat of the ruling at the provincial level exposed the government’s strategy, which neglected the level of activity to prioritize the decrease in inflation.
On September 7, the ruling party lost the elections of the province of Buenos Aires (PBA) and, since then, the country risk did not stop, exceeding this Friday the 1,500 basic points, while the spot dollar reached the roof of the band. The strategy was exposed: prioritize the decrease in inflation, disregarding the level of activity, ended up toll on the polls. With this backdrop, the possibility that the Argentina Access international debt markets in 2026 seems more and more distant.
Broadly speaking, we can summarize three main reasons. One of them is to call the political risk that does not seem to have reached basic consensus. After the favorable result in PBA, Axel Kicillof emerges as the main presidential opposition candidate thinking about 2027. Although he showed a moderate profile for society in his interview with Carlos Pagni in LN+, He reaffirmed that he does not regret the nationalization of YPF and said that the debt with the IMF is “unpayable”statements that were not well digested by the bonds.
The political risk is on both sides of the counter. The “plan to get” with low inflation pushed the rates in pesos at ridiculous levels with a single objective: contain the dollar and, therefore, inflation. While that story was left behind, now the Central Bank (BCRA) He is losing dollars to defend the ceiling of the scheme of exchange bands. Only between Wednesday and Thursday, the agency sold US $ 432 million.
The dynamic is worrying, and the economic team, for now, keeps its position firm. Thursday, Luis Caputo affirmed in three anchors that They will sell to the last dollar on the band’s roof. This further accelerates the country’s risk, since in the end they are less dollars to face debt matches in the future.
Finally, The BCRA starts from a low reservation level. It is not a novelty, but The data takes on special relevance since the possibility of rolling the capital of the dollars in the short term is practically ruled out. This, without mediating another alternative (Caputo suggested Thursday that they are working on it), It would force to cover the bulky maturities in foreign currency with international reserves and currency purchases in the change free market (MLC). This last point is key: that greater demand is consistent with a higher real exchange rate and, In this scenario, the band scheme looks unsustainable. In other words, with the change of expectations it is difficult to justify the drainage of dollars that the BCRA is suffering.
This way, Part of the progress achieved in almost two years (at least in financial terms) seems to have been erased in a matter of days. Beyond that, looking back does not work: reality is imposed and the “Warehouse account” is once again key. This is about calculating how many dollars the BCRA and the Treasure and compare them with foreign currency commitments.
The treasure practically exhausted its liquidity to intervene in the MLC and pay debt, staying with just US $ 640 million. The BCRA, on the other hand, has net reserves for US $ 2,232 million, although it adds US $ 17,090 million of liquid reserves (estimates as of September 16). On the other side, Between September 2025 and December 2026 they expire dollars for a total of US $ 23,963 million -Ans bonds in foreign currency, the IMF, the Paris Club, other international organizations (OOII) and Bopreals- that, assuming that the IMF performs the disbursement subject to the target of net reserves and that the OOII allow capital roll, reduce au $ s16.370 million.
The photo is challenging and explains why, under this dynamic, the probability that the debt in dollars will remain performing. As an example, The implicit probability of default measured in the CDs, is 21.3% for next yearjumping 5 points since the beginning of September, but the implicit probability of 4 -year -old default suffered a 21 -point leap and today is 68%. Maybe the worst is that Argentina It would waste a chance again, just when international markets are flowing to emerging and districired credits.
Pakistan, which a few months ago paid as Argentina, today operates in a digit, we went to 20% (Weighted average yield of the global). The countercara is that the weighted average price of the Argentine bonds is quoted in just 51 cents per dollar, almost 20% less than the 61 cents worth on Friday, September 5, before the elections in PBA.
PPI analyst
Source: Ambito
