Moody’s Investors Service lifted Argentina’s credit outlook to stable from negative amid expectations for support for policy changes after the presidential elections.
The decision comes a week after opposition candidate Mauricio Macri ended up nearly tied with frontrunner Daniel Scioli in elections. Macri is now the favorite to win a runoff vote on Nov. 22 and succeed President Cristina Fernandez de Kirchner.
"The likelihood of a break from the past is rising regardless of who ultimately wins the presidency," analysts led by Gabriel Torres wrote in a statement.
Argentina has been locked out of international credit markets following a decade-long legal battle with holdouts from its 2001 default.
The credit rating could further increase if the country’s economic policies "became more consistent and predictable" and opportunities for external funding increased, according to the New York-based firm. Moody’s rates Argentina Caa1, or seven levels below investment grade.
The report also noted that the nation may return to a negative outlook if there’s a "persistent decline" in international reserves, which are currently hovering near their lowest in nine years. The country would receive a further downgrade if Argentina’s current default leads to losses greater than 20 percent for investors, they added.