Moody’s upgrades Argentina’s outlook after presidential election

By FXStreet FXStreet (Córdoba) – The rating agency upgraded Argentina’s outlook for the second time in a month and is now at positive with a Caa1 grade. The move by Moody’s Investors Service follows Sunday’s presidential election. President-elect Mauricio Macri, from the opposition beat Daniel Scioli, from the official party. According to Moody’s, Macri is more likely to introduce credit positive policies, including a resolution of the holdouts creditors.

Key Quotes:

“The main driver of the outlook change to positive from stable is Moody’s expectation that Argentina’s policy stance will become more credit positive in the aftermath of Sunday’s elections in which Mauricio Macri was elected Argentina’s president for the 2015-19 term.”

“A prompt resolution of the holdout saga is a key Macri pledge in this regard, and is required for the government to borrow abroad, which it will probably need to do in order to meet upcoming debt service obligations. Official reserves have fallen to below $22 billion, raising uncertainty about the government’s ability to meet 2016 debt service obligations and adding pressure for a swift resolution with holdout creditors.”

“In addition, we expect the new administration to devote efforts to improving the economic and institutional environment over the coming months, through …read more

Source:: FX Street