Argentine companies are facing an increasingly difficult task to keep up with payments on dollar debt, hiking the risk of a wave of corporate defaults after the country tightened access to foreign currency to stem a sharp decline in reserves, Reuters reported. The central bank move, which pressured firms to restructure their debts and tightened individuals’ access to greenbacks, jolted local markets, pummeled bond prices and equities and heightened demand for black market dollars.

Less than a month after Argentina’s $65 billion debt restructuring, bond prices show growing concern the government may struggle to pay its obligations, Bloomberg News reported. The country’s yield curve has inverted in the week since officials announced foreign-exchange restrictions to help conserve cash. Investors perceived the move as an act of desperation instead of a workable solution to stem the drain in foreign reserves, and prices for short-term bonds dropped.

Argentina’s unemployment rate jumped to 13.1% in the second quarter of the year as the country was swiped by the coronavirus pandemic, the official statistics agency said on Wednesday, the highest since 2004 and up from 10.4% in the previous quarter, Reuters reported. Argentina imposed a strict lockdown in mid-March, hitting an already shaky economy in recession since 2018 and leaving many businesses struggling to survive. The country now has over 650,000 confirmed cases of COVID-19.

Argentina’s economy contracted a record 19.1% in the second quarter versus the same period a year earlier as the coronavirus pandemic crippled production and demand, though was slightly better than analyst forecasts, Reuters reported. The steep fall, deeper than a 16.3% drop during Argentina’s major 2002 crisis, came as the South American country imposed a strict lockdown in mid-March to stem the virus. The country has over 640,000 confirmed COVID-19 cases, and nearly 13,500 deaths.

Argentina’s new dollar bonds have plunged back into distressed territory just two weeks after the nation restructured almost $65 billion in debt. The securities fell for the fourth consecutive day Monday to an average 39 cents on the dollar, Bloomberg News reported. The $16.1 billion in bonds maturing 2030 tumbled 3.1 cents to 40.3 cents, the lowest since they began trading on Sept. 8 at about 50 cents. The bonds have a spread of around 1,300 basis points over U.S. Treasuries, well above the 1,000 points many investors consider to be the threshold for debt to be classified as distressed.

Argentina’s honeymoon with the International Monetary Fund is about to be tested as it looks to update a $57 billion agreement struck two years ago that failed to prevent a slide into recession and the country’s ninth sovereign default, Reuters reported. The IMF, often the target of angry protests in the streets of Buenos Aires, has looked to soften its tone with Argentina as the center-left Peronist government has restructured over $100 billion with private creditors this year. Now it is IMF money on the table.

Argentina’s standing in global markets is at risk once again after it moved this week to further restrict access to dollars as foreign reserves dry, a move analysts say will hit its much-needed economic revival and investor sentiment, Reuters reported. The central bank on Tuesday tightened the noose for dollar purchases, adding a 35% tax on people who tap a $200 monthly quota, and said card payments abroad would be included in the allowance. It also limited corporate access to foreign currency.

Despite one of the world’s longest and strictest lockdowns, the death toll in Argentina keeps rising. The increase in daily deaths from Covid-19 is the sixth highest in the world. More than 10,000 people have died so far. Argentina’s rate of about 234 deaths per million is still lower than its big neighbours — in Brazil and Chile, that rate exceeds 600 deaths per million — but the economic consequences of its lockdown have been especially dire, the Financial Times reported.

Argentina has defused fears of a messy default after it gained backing from creditors, allowing it to exchange 99% of the bonds involved in a $65 billion restructuring, a deal that could set a precedent for future sovereign crises, Reuters reported. After months of winding and tense negotiations, framed by the coronavirus pandemic, bondholders tendered 93.55% of the eligible bonds in the exchange, Economy Minister Martin Guzman said at a news conference on Monday.

After four months of tense debt talks, multiple pushed deadlines and amendments since an initial low-ball offer in April, bondholders will decide on Friday whether to accept the country’s $65 billion restructuring proposal, Reuters reported. The main three creditor committees holding a large chunk of the bonds backed a deal earlier this month, bolstering confidence that the government will get the required level of support to allow a full deal to go ahead without holdouts.