Argentina

Argentina is weighing whether to introduce a managed exchange rate regime — a “dirty float” — once it lifts its current foreign exchange controls in 2025, according to policymakers, Bloomberg News reported. The South American nation has been restricting foreign exchange and capital market operations for the past five years, forcing exporters to sell their dollars. The controls are also preventing companies from sending dividends abroad and limiting individuals from buying foreign currency.

Argentina's economy is expected to have contracted 2.6% in the third quarter of 2024 versus a year earlier, the sixth straight such decline, but expanded against the quarter before, breaking a technical recession going back to the end of last year, Reuters reported. A Reuters poll on Thursday, involving 13 local and foreign analysts, gave the year-on-year contraction of gross domestic product (GDP), which follows a 1.7% contraction in the second quarter and a steep 5.1% drop in the first quarter.

Argentina’s monthly inflation slowed to the lowest level since July 2020, handing President Javier Milei another victory on voters’ biggest concern a year after taking office, Bloomberg News reported. Consumer prices rose 2.4% in November, compared with the 2.8% median forecast of economists surveyed by Bloomberg. Annual inflation slowed to 166%, according to government data published Wednesday.

Argentina's monthly inflation is likely to have remained under 3% in November, near its lowest level of the year but slightly up from the month before, underscoring the challenge for libertarian president Javier Milei to rein in prices, Reuters reported. A Reuters poll of analysts published on Tuesday showed a median forecast rise of 2.8% in the month after 2.7% in October. Estimates ranged from a 2.4% increase to 3%. Argentina has been battling to bring down what has been the highest inflation rate in the world, peaking at almost 300% a year.

Province of Buenos Aires Governor Axel Kicillof said he would try to block any federal government efforts to sell or shut down the loss-making national carrier, Aerolineas Argentinas SA, Bloomberg News reported. President Javier Milei is looking to push a bill through congress that would clear the way to the airline’s privatization, part of his plans to shrink the size of the state in the debt-ridden nation.

President Javier Milei is imposing a December deadline on Argentina’s first bid to sell a long list of state-run companies to the private sector, outlining how challenging it will be for the government to unload businesses, Bloomberg News reported. The privatizations are part of Milei’s aggressive austerity campaign that he symbolizes with a chainsaw. He doesn’t believe the government should run companies, and says repeatedly that “everything that can be privatized, we’re going to privatize.” Milei is hoping to sell off state-run railways, banks, an airline and much more.

Argentina's state-run oil company YPF will seek $2 billion in financing in the second quarter of 2025 to complete its Vaca Muerta Sur project, Reuters reported. The project is being carried out by Vaca Muerta Oil Sur (VMOS), which is controlled by YPF, and aims to transport an additional 390,000 barrels per day from the Vaca Muerta formation to a coastal export terminal in Rio Negro province. The company is seeking $1.5 billion from foreign investors and $500 million locally and hoping to add Pampa Energy, Vista, Shell, Chevron and Pan American Energy as partners.

Argentina’s credit rating was raised two notches by Fitch Ratings, which said it expects the government will make upcoming payments on hard-currency bonds, Bloomberg News reported. Fitch lifted the South American nation’s long-term rating to CCC from CC, eight notches below investment grade and on par with Bolivia. Fitch doesn’t assign an outlook for that rating.

Argentine President Javier Milei's dramatic austerity agenda has helped lower inflation, but the slowdown has come at the cost of consumption in a battered economy where more than half of the country has fallen into poverty, Reuters reported. The libertarian president, nearing a year in office, has celebrated falling inflation as one of his government's key accomplishments, after one of the largest adjustments in public spending in recent history.

Argentina’s central bank lowered its benchmark interest rate Friday for the first time in nearly six months as President Javier Milei continues to oversee a slowdown in inflation in the crisis-prone economy, Bloomberg News reported. The monetary authority cut borrowing costs to 35% from 40%, according to a press release sent via text message. The decision is based on the country’s liquidity context, the lowering of consumer price expectations and the government’s fiscal anchor, the bank said. Argentina also reduced rates for notes known locally as pases to 40% from 45%.