Sat. Oct 19th, 2019

Moody's reduces the Argentine outlook from stable to negative

The Moody's risk agency reduced the rating outlook for Argentina from stable to negative this Friday, but kept the note in B2 for the long-term issue in local and foreign currency.

According to the own qualifier in a report, its decision to change the perspective to negative of Argentina – in recession from a year ago- reflects the "increase of the uncertainty" with respect to the continuity of the policies that address "fundamental imbalances" and restore "reliable access to international capital markets".

In addition, it warns of the "increasing risk" for the political uncertainty itself, in a year of presidential elections, to be held on October 27 and will face the current president, Mauricio Macri, with the main Peronist candidate, Alberto Fernandez, who is accompanied of the exmandataria Cristina Fernández as a candidate for the Vice Presidency.

On the other hand, the affirmation of the B2 rating reflects Moody's expectation that Argentina's main credit metrics will not worsen in the next period.

"The rating level balances a growing debt burden and a record of economic volatility with comparatively high economic development and support from the International Monetary Fund (IMF)," the rating agency said, referring to the financial aid plan signed in 2018. between the Government of Macri and the multilateral credit agency.

The IMF Executive Board meets Friday to formalize a new $ 5.4 billion disbursement of the $ 56.3 billion loan approved in 2018, following the fourth review of its financial assistance program.

The loan, requested by Argentina after the heavy devaluation of the peso started in April of last year, mainly due to the flight of capital from emerging economies to the United States, is of the stand-by type, which requires of a strong intervention of the multilateral institution in the national economic policies.

(tagsToTranslate) Moodys (t) stable (t) negative (t) perspective (t) Argentina

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