Sunday, December 10

Argentina’s bond prices touch record lows

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NEW YORK — Argentina’s dollar bond prices plowed record lows on Wednesday as investors continue to weigh the country’s economic policy outlook after the abrupt resignation of the finance minister over the weekend.

Argentina’s new economy chief, Silvina Batakis, told officials at the International Monetary Fund that she supports the objectives of a $44 billion program and will work constructively with the global lender, a key focus for investors.

However, the market signals were of caution, with two of the six dollar bonds outstanding breaking below 20 cents on the dollar.

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“The unexpected resignation of (Martin) Guzman last Saturday and the appointment of the new FinMin Silvina Batakis opened up a new period of financial and macroeconomic uncertainty,” JPMorgan said in a Wednesday note.

Uncertainty about the direction of the economy added to external pressures on Argentina and other emerging markets. Stubborn inflation and concern about a de-anchoring of inflation expectations in the United States prompted the Federal Reserve’s outsized interest rate increase last month, minutes of the latest policy meeting showed.

Emerging markets suffered a fourth straight month of portfolio outflows in June, notching the longest losing streak in seven years, as recession fears and inflation rattled investors.

(Reporting by Rodrigo Campos in New York Editing by Matthew Lewis)