Country risk, the extra yield investors demand to hold Argentine dollar bonds, reached 675 points in trading on Monday, the highest this year and about 4% above Friday’s 648.
Calculated by JP Morgan, the gauge is the gap between Argentine dollar bond yields and US Treasuries, so 675 points is 6.75 percentage points. The higher it climbs, the more the government pays to borrow and the harder it becomes to refinance debt.
The reading passes the 650 points reached on October 2 and is the highest since late October 2025. Argentine bonds and the country’s stocks listed in New York fell on the day, and yields on the main global bonds were between about 10.5% and 11.8%, according to market data.
Analysts cite two causes. One is abroad: US inflation accelerated in September, raising the chance the Federal Reserve lifts interest rates again at its meeting at the end of the month and keeping US government bond yields at their highest in more than 20 years, according to the brokerage Cohen. That raises borrowing costs for every issuer, and most for riskier ones such as Argentina.
The other is at home, where investors are weighing how the government will pay its 2027 bills. Bloomberg reported last week that the government had not sold a local dollar bond (the Bonar) in two months, its longest gap since the program began in February, as yields on those bonds rose above 12%.
The government had planned to sell almost US$1 billion more this year and US$5 billion in 2027, against about US$25 billion in foreign-currency debt payments due next year. Economy Minister Luis Caputo said last week that the government still expects to sell local bonds in 2027 and could use its currency line with China’s central bank if it cannot.
The new MSCI Merval index, which replaced the S&P Merval on Monday as the main stock benchmark of the Buenos Aires exchange, fell about 1% in its first session.
INDEC, the national statistics agency, publishes its August economic activity estimate on Wednesday.