Argentina Country Risk Tops 600 Points as Merval Falls a Fifth Session

Argentina’s country risk measure rose above 600 points on Friday for the first time in about six months. The main share index, the Merval, fell for a fifth session in a row.

The gauge tracks the extra yield investors demand to hold Argentine dollar bonds instead of United States Treasuries. It had stood at 578 points on Thursday, and it has been climbing for more than a week.

What the Numbers Actually Say

The figure depends on when you looked. La Nación reported 602 points at midday, up 24 points or 4.2 percent, citing the market data provider Rava.

Río Negro and El Cronista both recorded an intraday high of 628 points, then 611 in the early afternoon. Infobae and the television channel TN gave a close of 609 points, up 31 on the day.

AméricaEconomía and the Entre Ríos outlet El Once reported 602 points as the session reading. None of that is contradictory, because the index is quoted continuously and the outlets published at different hours.

The comparison with the past is also disputed. Infobae dated the last such level to 7 April, while Río Negro placed it in late March.

Why the Line at 600 Matters

Country risk is not a mood reading but a price. It is the gap in yield between Argentine dollar bonds and equivalent United States government debt, measured in points.

One hundred points equal one percentage point of extra interest. At 600 points, Argentina would pay roughly six points more than Washington does to borrow for the same term.

That is why the level, rather than the daily move, is what the government watches. President Javier Milei‘s economic team says it wants to sell bonds abroad again, and it cannot do so cheaply at this price.

Río Negro wrote that the move complicates the team’s plan to reopen access to voluntary international credit. Argentina has been shut out of those markets since its 2020 debt restructuring.

The Retreat Underneath

Sovereign dollar bonds fell about 1.2 percent on average, Infobae reported. Río Negro’s numbers show the longest maturities took the worst of it, with the Global 2046 down 2.9 percent.

Shorter bonds lost far less, some under one percent. That pattern says investors are pricing doubt about the years ahead rather than an immediate default.

Shares followed the bonds down. Infobae reported the Merval closing 1.6 percent lower at 2,893,751 points, its weakest since 20 August.

TN put the fall at 1.6 percent in pesos and 2 percent in dollars, and La Nación called it a fifth consecutive negative session. Río Negro’s list of losers had Edenor, Transportadora de Gas del Sur and Banco Macro each down more than 2 percent.

Reserves and the IMF Bill

The same day, Argentina paid the International Monetary Fund. Infobae reported gross central bank reserves falling US$600 million to US$48.245 billion, their lowest since 13 July, after a payment of about US$795 million.

The bill was 583.3 million special drawing rights, the Fund’s own accounting unit, and outlets converted it differently. El Cronista put it near US$803 million, while the Fund’s rate for the day gave about US$793 million.

It was principal rather than interest, and the first such repayment on a loan taken in 2022. The Treasury paid from its own dollar deposits, which leaves net reserves unchanged even as the gross figure drops.

The peso weakened too, with La Nación reporting the official retail rate at 1,545 pesos per dollar, its weakest of the year. Infobae had the wholesale rate at 1,525.50 pesos to the dollar and the parallel street rate at 1,560.

What the Government Says, and What Its Critics Say

The government has not given a detailed account of why the selling started. Perfil reported the president telling journalists at the United Nations General Assembly that Argentina had dollars pouring out of its ears.

Economy Minister Luis Caputo spent the week in New York, meeting bankers at JP Morgan. The magazine Perfil reported he told them Milei would win re-election outright in 2027.

Eric Ritondale, chief economist at the broker Puente, said the external picture was the main trigger. The consultancy Fernando Marull y Asociados countered that only part of the jump was global, citing electoral risk.

Mauricio Villacorta of the broker IOL said local assets deepened a downward trend as credit weakness pushed risk past 600 points. Perfil’s own reading was harsher, that Caputo missed his chance to borrow abroad when the gauge sat under 300 points.

What Would Turn It Around

The reasons investors give for selling are mostly about growth and tax revenue. Economic activity fell 2.9 percent in July from June, and 1.4 percent from a year earlier.

Poverty reached 32.3 percent in the first half of the year, up from 28.2 percent. The brokerage Facimex warned that weaker growth would show up in tax receipts, and then in the fiscal surplus itself.

Two payment dates now matter more than any single reading. About US$865 million of IMF interest falls due in early November, and roughly US$4.3 billion is owed to bondholders in January.

A Fund review of the 2025 programme is also under way in Buenos Aires. The consultancy 1816 judges a return to international debt markets before the 2027 election unlikely on current terms.

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