January 10th, 2025

1. Country risk drops to 569 points
Argentina’s country risk fell to 569 basis points, marking a milestone by settling below 600 points for the first time since September 2018. This decline is linked to the recent US$1 billion debt repurchase agreement (repo) between the Central Bank of Argentina and international banks, a move designed to bolster reserves and improve market confidence. In addition, it coincides with the announcement of the important debt payment made by the Treasury, generating positive expectations among investors. In the last year, the country’s risk experienced a significant reduction of 71%, reflecting the improvement in economic expectations. However, analysts warn that, although this trend is encouraging, Argentina will need a further decrease in country risk, bringing it to a range between 450 and 500 basis points, to consider a sustainable return to international debt markets.
El Cronista: El riesgo país cae por debajo de los 600 puntos por primera vez desde 2018
2. The government questions the governors about the rate hike
The Government is back on the charge against municipal taxes. The Ministry of Economy had prohibited the collection of these taxes in utility bills, after the fiscal transparency regime – which requires explicit adhesion of the different jurisdictions – came into force on January 1st, and after the Executive called on businessmen to put pressure on mayors. The ministry took a new step to prevent the adjustment in national expenditure from being compensated by mayors with more increases in the taxes charged to the private sector. To make matters worse, this could result in a higher tax burden on companies and an increase in the price level. In this regard, the Ministry of Economy sent a note to the 23 provinces requesting them to “implement measures so that their municipalities comply with the legislation and promote the repeal of municipal taxes, of those whose value is not proportional to the cost of providing the service.”
La Nación: El Gobierno presiona a los gobernadores por el impacto de las tasas municipales en la economía
3. The Treasury pays US$4.7 billion to bondholders
On Thursday, January 9th, the national Treasury paid US$4.7 billion to bondholders for the first bond maturity of the year. This is the first major payment that the government will make this year. The decision had a positive impact in the market, as it generated increases in local assets in the last few days, as well as a decrease in country risk. However, it will have a negative impact on reserves, although the Central Bank of the Argentine Republic bought US$137 million during Wednesday’s trading session to cushion this effect.
Perfil: El Gobierno pagará US$ 4.700 millones a los bonistas: qué pasará con el mercado y las reservas
4. Governors of Córdoba and Santa Fe call for the reduction of agricultural withholding taxes
The governors of the main agricultural producing provinces, Santa Fe and Córdoba, have urged President Javier Milei to reduce or eliminate withholding taxes on agricultural exports. They stated that the countryside should not continue to subsidize the “Buenos Aires conurbation.” Maximiliano Pullaro, governor of Santa Fe, pointed out that his province contributes between US$4 billion and US$5 billion annually in withholdings, resources that, according to him, could be reinvested locally to boost the regional economy. Martín Llaryora, governor of Córdoba, emphasized the urgency of alleviating the tax burden on the agricultural sector, considering its fundamental role in the country’s growth.
5. President Milei opens the door to an agreement between PRO and LLA
In an interview with a local media outlet, President Javier Milei was in favor of “a total agreement” of La Libertad Avanza with PRO for the legislative elections and did not rule out supporting a hypothetical candidacy of Mauricio Macri for senator for the City of Buenos Aires. The President seemed less demanding than in his previous statements regarding the possible agreement and said that his ideal is “that we go together and sweep away Kirchnerism.” In this context, through his social networks, PRO leader Mauricio Macri indicated, “We can represent together the banners of change, freedom and institutions.” “Dear Javier. From Pro we will always be on the side of those who work to end populism, demagogy and lack of transparency. In short, so that Kirchnerism never again governs the country or any of the 24 Argentine provinces,” wrote the former head of the Executive in his X account.