Global rates complicate Argentine financing, but improve export outlook

Rising U.S. Treasury bond yields have once again complicated Argentina's eventual return to international markets. The ten-year rate reached 4.80% annually and the thirty-year rate exceeded 5.20%, the highest levels in at least 15 years.

The scenario raises the cost of global financing and complicates the financial program designed by Luis Caputo's team to address debt maturities in 2027. That scheme contemplates tapping the local market, increasing dollar purchases, and utilizing credits from international organizations.

With a country risk near 500 basis points, Argentine bonds in dollars offer yields of approximately 10% annually. Even an eventual decline to 400 basis points, the level observed in July, would leave the cost of an external placement near 9% annually, still too high to return to debt issuance.

In that context, the Treasury refrained last week from placing a new tranche of Bonar 2029 to avoid validating a rate close to double digits. Instead, it concentrated the auction on short-term peso instruments, with maturities within the current presidential term.

An improvement in the export environment serves as a counterbalance. Oil is holding around USD 90 per barrel, driven by escalating conflict in the Persian Gulf, and the energy balance surplus has already exceeded USD 6.8 billion. Soybeans, meanwhile, are trading near USD 480 per ton, with year-on-year gains of approximately 25%, a favorable factor for the upcoming season.

The International Monetary Fund warned that various central banks are revising upward their rates or monetary policy expectations in response to a combination of inflation, supply shocks, energy prices, and fiscal risks. Within that framework, the rise in borrowing costs affects both indebted governments and families and companies needing credit, and reduces the attractiveness of investing in emerging markets.