Oct. 7 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner will undergo surgery tomorrow to remove an accumulation of blood in her skull following a blow eight weeks ago, according to a statement issued by the hospital where she is being treated.
Fernandez, 60, entered the Favaloro Foundation clinic in Buenos Aires today, two days after her medical team had advised her to rest for a month. Yesterday, the president complained of tingling in her left arm which prompted doctors to recommend the operation, according the statement.
Vice-President Amado Boudou, who replaced Fernandez in late 2011, when she was misdiagnosed with thyroid cancer, has taken over her duties.
Fernandez, who is half way through her second four-year term, has seen her popularity tumble since winning re-election in 2011 as she faces growing discontent over rising crime, currency controls and estimated 25 percent annual inflation. The 60-year-old leader suffered a head trauma, for which initial tests had been negative, on Aug. 12, the day after primaries for Oct. 27 mid-term elections, presidential spokesman Alfredo Scoccimarro said in a statement on Oct. 5.
“It’s going to change the political dynamic,” Fabian Perechodnik, an analyst with Poliarquia Consultores, said by phone from Buenos Aires before the need for surgery was announced. “If she’s not there for a month, exactly when there are elections, it’s a significant development.”
Political adversaries campaigning for the congressional elections, including Fernandez’s former cabinet chief Sergio Massa and the mayor of Buenos Aires city Mauricio Macri, wished her well in messages posted to Twitter before the need for surgery was announced.
Fernandez’s surgery is considered low risk as it doesn’t involve contact with the brain, Pedro Lylyk, a brain surgeon at the Eneri clinic in Buenos Aires, who isn’t treating Fernandez, said in a telephone interview.
“It’s a simple procedure,” Lylyk said. “She’ll be in intensive care for 24 to 48 hours and will be hospitalized for another three to four days followed by a month of recovery time.”
In the August primaries, Fernandez’s ruling alliance secured just 26 percent of the nationwide vote, and her candidate in Buenos Aires province, the country’s largest by population, lost to Massa by five percentage points.
Since then, Argentine bonds and the Merval stock exchange have rallied on speculation a new government may take power in 2015 with more market-friendly policies. Fernandez, who is banned from a third term by the constitution, last year seized oil producer YPF SA from Spain’s Repsol SA and has restricted foreign exchange purchases and underreported inflation, causing investment to fall.
“The news will likely increase speculation of a post-election transition period in which Fernandez will not enjoy the same kind of unrestricted power over domestic policies,” Diego Ferro, co-chief investment officer at Greylock Capital Management, said in an e-mail. “It will not likely change the outcome of the election.”
Even assuming a full recovery, this is positive for Argentine debt, Ferro said.
While Argentina’s average borrowing costs of 12.78 percent are the highest in emerging markets, the average yield on its dollar bonds has fallen 22 basis points since the primary elections compared with an 11 basis point rise for developing nations, according to JPMorgan Chase & Co.’s EMBI Global index.
The extra yield investors demand to hold Argentine debt instead of U.S. Treasuries fell five basis points, or 0.05 percentage point, to 1,001 basis points at 3:05 p.m. in Buenos Aires.
Fernandez’s health may create sympathy among Argentines and reverse her slide in opinion polls, according to Michael Shifter, President of the Inter-American Dialogue. Fernandez’s support rose after her husband and predecessor Nestor Kirchner died of a heart attack in 2010, he said.
“It’s conceivable that she might get a slight bounce and a bump in the polls,” Shifter said in a telephone interview from Washington. “It does at the same time add to uncertainty about the overall situation in the country.”
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