Argentinas return to global debt markets is delayed again: what happened now?

In mid-July, JPMorgan’s EMBI+ index for Argentina which reflects the interest rate Argentina would pay to borrow abroad touched 402 basis points, its lowest level since April 2018. As the days went by, however, the chance of breaking through the 400-point barrier gradually faded. While the economic team didn’t set it as an explicit goal for the JPMorgan index to fall below 400 points, there are several reasons it would be desirable. First, it would mean a lower cost of financing for the Argentine government. Second, it represents a kind of “psychological barrier”not only because it would be the lowest reading of the Milei administration, but also the lowest level in more than eight years, since April 20, 2018, during Mauricio Macri’s presidency. This Friday, August 15, country risk closed at 469 points, a 16.6% rebound from that low. Argentina’s country risk currently sits at a level similar to Ecuador’s and Bolivia’s, more than double that of Mexico and Colombia, close to four times that of Brazil and Peru, nearly five times Chile’s, and a little over six times Uruguay’s EMBI+ index. The structural factors The think tank Fundacin Mediterrnea argued that Argentina shows “better fiscal variables than much of the region,” yet its country risk won’t break below 400 basis points. Why isn’t Argentina’s index falling further? Analysts say it comes down to structural issues. The first reason is the low level of reserves at Argentina’s Central Bank (BCRA for its Spanish acronym). As of December 2025, gross reserves were equivalent to just 6% of GDP, according to the think tank’s estimates. By comparison, the regional average is 16.3% of GDP. Even so, analysts noted that the BCRA has bought around US$13.5 billion so far in 2026, which currently represents close to 7.8% of GDP. Restrictions on international capital movements known as the corporate “cepo” also help explain current country-risk levels. The track record of debt defaults over recent decades carries a reputational cost in terms of the rate. The electoral factor and the external question Another factor could add to the mix, according to the think tank: the risk of a “drastic shift in economic policy” that Argentina faces “at every presidential election over the past two and a half decades.” It’s an element that “remains in play” for the 2027 election and that “surely” weighs on the current level of local country risk. Eric Ritondale, chief economist at the brokerage Puente, told the Herald that the recent move in country risk “reflects a mix of external and local factors.” On the domestic front, he acknowledged that recent weeks had seen “a slight decoupling” from Argentina’s main comparable countries. He argued this “can be explained by market pricing in the electoral cycle earlier than usual,” after some opinion polls and confidence indicators showed a “marginal” pullback in support for the government. On the global front, he explained that the high level of the Federal Reserve’s interest rates “has put pressure on” fixed-income assets in emerging markets generally, “contributing to the widening of local country risk.”