BUENOS AIRES (Reuters) – Ratings agency Fitch on Friday downgraded Argentina’s sovereign debt rating from ‘B’ to ‘CCC,’ flagging an increased likelihood of a default in the wake of a shock primary election result that plunged the country into its latest economic crisis.
Argentine markets were in free-fall for most of the week after Sunday’s vote when center-left presidential candidate Alberto Fernandez trounced center-right President Mauricio Macri. The scale of Fernandez’s victory suggested he could win the October ballot in the first round, potentially putting an end to free-market economic reforms and an IMF-backed austerity plan.
Fitch - Downgrade - Brings - End - Week
The Fitch downgrade brings to an end a tough week in which the peso lost nearly 20% of its value, forcing the central bank to eat into its reserves with dollar auctions. Fitch said it expected Argentina’s economy to contract 2.5% in 2019, down from a previous forecast of 1.7%. Fitch added that it saw government debt rising to around 95% of gross domestic product in 2019.
“The downgrade of Argentina’s ratings reflects elevated policy uncertainty following the primary elections,...
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