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LatinNews Regional Monitor: Brazil & Southern Cone - 12 March 2020

In brief: Argentina’s country risk further escalates

* Argentina’s sovereign bond risk spread, measured by JP Morgan, has continued its surge, peaking at 2,958 basis points on 11 March, its highest level since 2005. The increase in the spread comes after global financial turmoil provoked a jump from 2,350 points to 2,804 points in the risk measure on 9 March. Argentina’s Merval stock index also took a further hit, falling 4.19% on 11 March, in line with other global equity markets, after falling 13.75% on 9 March. These indicators are building the pressure on the government led by Alberto Fernández, which is currently in the critical phase of trying to renegotiate US$68.84bn of its debt issued under international law. The Fernández administration hopes to conclude the debt renegotiation by the end of March, but the negative scenario in the financial markets raises mounting uncertainty over whether this can be achieved.

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