Latest news with #currencycontrols
Yahoo
17-07-2025
- Business
- Yahoo
Milei Wins Second Upgrade by Moody's on Easing FX Controls
(Bloomberg) -- Argentina's credit rating was upgraded by Moody's Ratings for a second time this year, with the agency citing the easing of currency controls and support from the International Monetary Fund. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say Moody's raised the country's credit score by two notches, to Caa1 from Caa3, on par with Egypt and Suriname, according to a statement on Thursday. The nation's outlook was changed to stable from positive. The upgrade comes amid President Javier Milei's attempts to transform South America's second-largest economy. Strategists and analysts alike have lauded the libertarian's efforts to tamp down rampant inflation and reverse years of endemic budget deficits. 'The upgrade reflects the decrease in the risk of a credit event, as the gradual lifting of foreign exchange restrictions enables a transition toward a more robust foreign exchange regime anchored on building international reserve buffers,' Moody's said in a note. Milei's policies have brought price increases to less than 2% a month, with annual inflation now at its lowest since 2020. He's also put the country on track for a primary surplus in 2025, the first in over 15 years, easing the debt burden. The economy returned to growth this year, expanding 7.7% in April, more than expected. But Wall Street has cautioned that despite a new IMF program and more liberal exchange regime, Milei and his team need to amass more hard-currency reserves, something that authorities have pledged they won't do until the peso trades at around a level of 1,000 per dollar. It is currently above 1,200. Another chief concern is whether Milei manages to expand his legislative support during midterm elections later this year. The vote is a key test of support for the administration's harsh belt-tightening campaign. Argentina's dollar bonds underperformed their peers on Thursday before the upgrade was announced, with notes maturing in 2035 losing 0.6 cents on the dollar to trade at around 64 cents, according to indicative pricing data compiled by Bloomberg. The notes now yield 11.94%. Moody's Ratings lifted Argentina's credit score one notch to Caa3 in January, and raised the outlook to positive from stable. Fitch Ratings then raised the nation to CCC+ from CCC in May. S&P Global Ratings affirmed its CCC rating in early February. --With assistance from Nicolle Yapur. (Updates with inflation figures in the fifth paragraph, bond prices in the eighth) How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All What the Tough Job Market for New College Grads Says About the Economy Forget DOGE. Musk Is Suddenly All In on AI The Quest for a Hangover-Free Buzz How Hims Became the King of Knockoff Weight-Loss Drugs ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
17-07-2025
- Business
- Bloomberg
Milei Wins Second Upgrade by Moody's on Easing Currency Controls
Argentina's credit rating was upgraded by Moody's Ratings for a second time this year, with the agency citing the easing of currency controls and support from the International Monetary Fund. Moody's raised the country's credit score by two notches, to Caa1 from Caa3, on par with Egypt and Suriname, according to a statement on Thursday. The nation's outlook was changed to stable from positive.
Reuters
16-05-2025
- Business
- Reuters
Argentina's black market for dollars falters as currency controls are eased
BUENOS AIRES, May 16 (Reuters) - On the streets of downtown Buenos Aires, where years of tough currency controls fermented a thriving black market for dollars, an army of illegal money traders are finding times hard under the economic reforms of Argentine President Javier Milei. Milei tore down most currency controls last month, easing access for Argentines to official currency markets after six years of restrictions. That is not good news for the street traders, known locally as "arbolitos" (literally, little trees), but has been welcomed by locals and companies who can now exchange pesos for dollars at greater amounts and with more ease than before. Part of a wider set of economic reforms Milei has enacted since taking office in late 2023, the easing of currency controls is a bold attempt to shake the economy out of years of crisis that had made the South American country a pariah of global markets. Investors had called for the end of capital controls to boost trade and erase distortions caused by huge gaps between the official exchange rate and the black market. In recent weeks, the dueling FX rates converged for the first time since 2019, when the government had imposed capital controls to defend a crashing peso currency. Everyday Argentines no longer need to resort to the black market to get their money's worth, while companies are able to access dollars to pay for imports without having to abide by a previous waiting-period. "It brings back confidence to the financial system," said Ariel Coremberg, an economist at the University of Buenos Aires and an adviser to Milei, adding that the measure will increase taxable flows as fewer people seek black market dollars. "Us arbolitos here are going through a crisis," said Francisco, 50, a black market trader in front of a flower stand on a busy street in downtown Buenos Aires last week, who asked to only be identified by his first name. Nearby, another money trader who gave his name as Leo said: "Our legs are being cut from under us." The winding down of currency controls was part of a larger macroeconomic shift that was key to the country sealing a new $20 billion deal with the International Monetary Fund last month and starting to lure investors it needs to boost the economy. Companies will be able to send new profits abroad without facing the restrictions they did previously. Foreign investors "all reacted well" to the lifting of the currency controls, said Fausto Spotorno, an economist at the OJF consultancy in Buenos Aires. "The question is where this money will be invested." To be sure, Argentina has become more expensive relative to its neighbors under Milei, cutting off a source of dollars as would-be tourists have baulked at the higher prices. Inbound tourism dropped by a quarter in the first three months of 2025 compared to the same period last year, official data show. And there will still be demand for the black market from the country's large informal workforce, said Federico Filippini, chief economist at financial consultancy Adcap in Buenos Aires. Both informal workers and business owners with undeclared income use the black market for exchange to avoid attention from the tax authorities. Many Argentines have also traditionally converted part of their peso income into dollars as a bulwark against volatility. But, said Guadalupe Calvano, a high school teacher in Buenos Aires, the reality was that many now did not have enough spare cash to convert it into dollars - on the black market or otherwise. "People lost their capacity to save," said Calvano. She said she used to put aside 10% of her salary to buy dollars but has stopped doing so because her salary has not increased to match a recent uptick in the cost of goods and the price of her utility bills. Inflation has cooled under Milei, but the income of state workers like teachers has dwindled in real terms. "I can't think about buying dollars while I'm not sure if I will make it until the end of the month or not," said Calvano.
Bloomberg
07-05-2025
- Business
- Bloomberg
Corporate Defaults Start Piling Up in Argentina: Shock Therapy
Cracks are starting to appear as Javier Milei removes the distortions that once characterized the Argentine economy, hurting companies that bulked up on debt by exploiting exchange rate gaps. The Argentine president in the past 16-plus months implemented sweeping changes, enforcing cuts to public works and generous subsidies for utilities. He most recently removed the currency controls that governed the peso for years.
