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LatinNews Regional Monitor: Brazil & Southern Cone - 24 April 2019

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In brief: Argentina

* The spread on Argentine sovereign bonds in JP Morgan’s Emerging Markets Bond Index (Embi) has increased by 2.72% to 868 basis points. This is Argentina’s highest country risk measure since 2014. The increase in the spread came after the finance ministry repurchased US$750m worth of treasury letters (Letes) on 23 April, as part of the efforts to restructure the country’s US-dollar denominated debt. However, the repurchase was achieved only after the finance ministry offered an interest rate of 5.47%, higher than the 5% rate originally offered. The difficulties that the Argentine government is encountering in raising cash in the financial markets has led the Institute of International Finance (IIF) to warn in a new report that the capital inflows in the country are weak and that the growing level of domestic capital flight pose a significant financial risk for the country.