Argentina's country risk index rose above 600 basis points on Friday for the first time since April, closing at 609 after a 31-point jump, according to La Nación. It was the gauge's 10th consecutive daily increase.
The JP Morgan index, which measures the premium investors demand to hold Argentine bonds over U.S. Treasuries, has added 97 points, or 19%, this month, extending the climb that had already pushed it to a five-month high earlier in the week. It has risen by about half since mid-July, when it touched 402 points, its lowest level since April 2018, according to the Buenos Aires Herald.
The selloff was broad on Friday. Sovereign bonds under local law fell 2.1% and dollar-denominated Globales 2%, while the S&P Merval dropped 1.6% for a fifth straight losing session, La Nación reported. The Herald said Argentine debt issued under New York law had lost 4% over five sessions. The official dollar reached 1,545 pesos at Banco Nación, its highest level of the year, and the wholesale rate rose 6 pesos to 1,525.50.
Analysts pointed to pressures from both sides of the equator. Long-term U.S. Treasury yields have climbed to their highest levels since the mid-2000s, and futures markets price a better-than-even chance that the Federal Reserve raises rates again at its October 28 meeting, according to CME Group data cited by the Herald. At home, economist Fernando Marull flagged concern over "the 2027 financial program," citing slower dollar purchases by the Central Bank and still-closed international debt markets. "Negative readings in economic activity and poverty indicators raise caution," said Gustavo Ber, pointing to July's 2.9% monthly drop in activity and a poverty rate that rose to 32.3% in the first half of the year.
The market slide followed a downgrade from the OECD. In its interim Economic Outlook published Wednesday, the Paris-based organization cut its forecast for Argentine growth this year to 2.6% from the 2.8% it projected in June, while keeping 2027 unchanged at 3%, according to Infobae. It sees inflation at 30.8% this year and 20.5% next year, compared with the 4% growth and 18% inflation assumed in the 2027 budget the government sent to Congress this month.
The rising spread comes as the government negotiates the IMF's third review of its program, which would unlock a new disbursement, and as provincial and corporate borrowers face higher costs to tap foreign markets. President Milei and Economy Minister Luis Caputo will make their next pitch to foreign investors in Paris during Argentina Week, including a plenary session at the OECD's own headquarters on October 1.