MediumIV Macro Policy & Sovereign Debt21 September 2026, Monday
Argentina's country risk climbs to 533 basis points as an IMF mission arrives in Buenos Aires for the third review
Country risk rose for a sixth consecutive day on 21 September to 533 basis points, a four-month high; the same day an IMF mission reached Buenos Aires for the third review of the 20 billion dollar programme.
Argentina's country risk premium rose to 533 basis points on 21 September 2026, its sixth consecutive daily increase and the highest level since 20 August, a four-month peak. The premium had moved from 485 basis points on 11 September to 524 on 18 September. In the wholesale market the dollar closed at 1,514 pesos on 21 September, against 1,493 recorded on 14 September. The secondary-market yield on the dollar-denominated 2029 bond governed by local law rose to about 10%; the same paper had been placed at 8.7% at auction. The move ran counter to the global trend: US equity markets gained 1.5-2.3% while Argentine bonds fell about 0.5%.
On the same day an IMF technical mission arrived in Buenos Aires for the third review of the 20 billion dollar Extended Fund Facility approved in April 2025. The mission is led by Joyce Wong and the review centres on reserves, financing risks and the budget. About 15.8 billion dollars has been disbursed under the programme to date. In the February and April 2026 reviews the fiscal targets were met while the reserve-accumulation target was missed; this time the picture is reversed: the central bank completed the 10 billion dollars of reserve purchases it had committed to, but the primary surplus target was narrowly missed.
The government projects a primary surplus of 1.3% of national income for 2026, roughly 9.7 billion dollars; the target agreed with the IMF is 1.4%, a gap of about 456 million dollars. The target was initially set at 2.2% and later lowered by 0.8 points. The primary surplus recorded in the first half of the year came in at 0.6%, below the 0.7% interim target. In the 2027 budget the government assumes growth of 4%, while the average expectation of private-sector economists is 2.9%. Argentina will pay the Fund 583.3 million SDR, roughly 803 million dollars, on Friday 25 September.
Talay assessment
Bottom line
Meeting the reserve target while narrowly missing the fiscal one shows that the burden in Milei's programme has shifted from the central bank to the treasury. Country risk climbing to 533 basis points despite global optimism signals that the market does not trust the 4% growth assumption in the 2027 budget or the electoral calendar. The most likely path is that the review is completed with a waiver; even so, a premium that stays elevated makes a return to external markets expensive.
Likely effects
- Argentina's external financingNegativeWeeks
A premium of 533 basis points and dollar bond yields at about 10% make new issuance expensive after the 803 million dollar payment to the IMF on 25 September, leaving the Treasury dependent on the domestic market.
- The IMF programmeUncertainWeeks
A projected primary surplus of 1.3% against the 1.4% target, together with the 0.6% outturn in the first half, makes a discussion of a waiver or a revised target unavoidable in the third review.
- Risk perception relative to TürkiyeNegativeWeeks
Within the basket of high-inflation emerging economies, Argentina's premium moving from 485 to 533 basis points may also increase volatility in Turkish risk indicators traded in the same basket.
- 2027 budget assumptionsNegative1–6 months
The 1.1-point gap between the government's 4% growth projection and the private sector's 2.9% expectation makes revenue estimates, and therefore the surplus target, fragile.
Possibilities, ranked
- 1The review is completed with a waiver55%
Meeting the reserve target carries the day, the deviation of about 456 million dollars on the primary surplus is covered by a waiver and the programme continues without interruption.
Watch: The IMF mission's end-of-review statement and the date of Executive Board approval
- 2Targets are lowered again25%
The Fund once more trims the 1.4% primary surplus target to fit election-year conditions; this weakens confidence in the programme's discipline and keeps the premium elevated.
Watch: A reduction of the 2027 primary surplus target below 1.4% in the programme documents
- 3The premium rises sharply20%
Electoral uncertainty and distrust of the budget assumptions deepen; country risk moves above 600 basis points and pressure on the peso intensifies.
Watch: Country risk passing 600 basis points and the dollar/peso rate moving clearly above 1,514
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Argentina country risk▲ 533 bp
- Dollar/peso (wholesale)▲ 1,514
- Dollar bond yield▲ 10%