MercoPress. South Atlantic News Agency

Argentina's country risk reaches highest since June 2005

Argentina's country risk according to JP Morgan signaled last Friday a new high, matching the June 2005 mark, following Standard & Poor's negative rating of Argentina's foreign debt.

The EMBI rate for Argentina which measures the additional interest rate on local bonds over the US Treasury benchmark jumped last Friday to 603 units. In June 2005 the EMBI was normalized in Argentina following the massive restructuring of its 2001/02 defaulted debt. On Thursday President Cristina Fernandez de Kirchner sacked her Economy minister Martin Lousteau following his proposal for a plan to cool the Argentine economy and help contain inflation, particularly consumer prices. S&P said it had downgraded Argentine bonds' risk rate precisely because the Kirchner administration refuses point blank to apply any cooling policies and insists that inflation is under control. In spite of the fact that the overall consensus is that inflation contrary to the "official" statistics of just below two digits is in the range of 18 to 24%.