Argentina's Local Currency Notes Raised by S&P on Macri Policies

  • S&P lauds efforts by Macri to fix macroeconomic imbalances
  • Foreign currency notes retain selective-default rating

Argentina’s local credit ratings were raised by Standard & Poor’s, which said newly installed President Mauricio Macri is taking the right steps to fortify the economy.

The grade was increased one step to B-, S&P said in a note Wednesday. Argentina’s foreign currency notes will continue to be rated as selective default until the government resolves its 2014 default, analysts wrote. Argentina has been locked out of international credit markets since its first default in 2001.

In his first month in office, Macri has overturned policies that throttled international investment, lifting capital restrictions, removing most export tariffs, and starting negotiations with holdout creditors who have sued the country for full repayment on its defaulted debt.

"The new administration has presented a credible plan to deal with long-standing macroeconomic imbalances, eliminated foreign-exchange restrictions, and begun negotiations with its holdout creditors," analysts led by Sebastian Briozzo wrote in the note. "Raising the local currency rating reflects recent steps to address some of the substantial economic imbalances prevailing in Argentina."

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