Despite the near-25% drop in the peso against the dollar so far this year, Argentina is not yet facing a sovereign debt crisis. The public debt ratio will rise this year, but not to an alarming level, and should stabilise if policymakers follow through with fiscal tightening. The government’s upcoming dollar debt repayment schedule also looks manageable. The big risk is that IMF talks break down, triggering a renewed run on the peso and a surge in bond yields.
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