Standard & Poor's (S&P) confirmed it would maintain its 'B' rating for Argentine debt, highlighting that the president Mauricio Macri administration was continuing to meet the goals laid out by the International Monetary Fund (IMF) as part of the huge credit line agreed last year.
We are affirming our long-term foreign currency and local currency ratings on Argentina at 'B' and our short-term foreign and local currency ratings at 'B', the agency said.
IMF approved a US$ 56 billion standby loan for Argentina to help the Macri administration implement a tough austerity program to stabilize the economy, and prepare for any financial emergency ahead of the coming October presidential election.
Reflecting strong policy commitment, Argentina continues to comply with challenging targets under its International Monetary Fund Stand-By Arrangement, despite a second year of economic contraction and uncertainties ahead of the October national elections, the agency said in a statement.
Argentina's current economic downturn began with a currency run in April 2018 that led the Macri government to request a loan with the IMF.
Last year the Argentine economy contracted 2.5% and this year the IMF expects a GDP reduction of 1.3%.
Persistent inflation and pronounced fiscal and external vulnerabilities prompted further adjustment of aspects of the exchange-rate framework, coupled with ongoing policy commitment, which have seemingly stabilized market volatility, said S&P.
The outlook on the long-term ratings remains stable, based on the balance of risks stemming from the uncertain election outcome, the need for the next government to continue to implement policies to stabilize the economy, slow inflation, and manage fiscal and external financing vulnerabilities and the manageable debt amortization profile of the next two years, said the agency.
It should be remembered that last July credit ratings Moody's changed the prospects of Argentine debt to negative, although keeping the B2 rating.