Argentina's risk premium falls to eight-year low of 417 points

Argentina’s sovereign risk premium dropped to 417 basis points, the lowest level since April 2018 and the lowest under President Javier Milei’s administration. The decline followed the government’s presentation of the 2027 budget, which reaffirmed fiscal surplus goals, a slowdown in inflation and further tax cuts, as well as a recent cabinet reshuffle that eased political tensions. Investor confidence was reinforced by the central bank’s record‑long buying streak – 120 consecutive days – which pushed foreign‑exchange reserves above US$48 billion, surpassing its annual target. The Banco Central added US$25 million on the day, bringing total 2026 purchases to over US$11.2 billion. The stronger reserve position, coupled with a US$5 billion sovereign bond issuance and credits from the IDB and World Bank, helped improve the sovereign rating to B‑ from S&P. Argentine dollar‑denominated bonds rose up to 1.4 % and equities listed on Wall Street gained, led by Loma Negra (+4 %). The official exchange rate held around $1.510 per dollar, with the wholesale rate near $1.488, while the risk premium fell to 415‑421 points in related market reports.