Argentine Markets Rally Amid Central Bank Dollar Accumulation and Improved Risk Outlook

Argentine Equities See Significant Gains

Argentine stocks have demonstrated a robust performance, with the country's main stock market index, the S&P Merval, recording a 16.80% increase over the past year as of January 22, 2026. This upward trajectory reflects a broader positive sentiment in the market, extending to Argentine companies trading as American Depositary Receipts (ADRs) on Wall Street. Investors have shown optimism regarding the long-term growth prospects of Argentine listed companies, whose earnings have reportedly grown by 91% per year over the last three years, with revenues increasing by 120% annually during the same period.

Central Bank Bolsters International Reserves

The Central Bank of Argentina (BCRA) has been actively engaged in strengthening its international reserves through strategic dollar purchases. In January 2026 alone, the BCRA acquired approximately US$715–US$716 million in the foreign exchange market. These efforts have pushed the nation's gross reserves to nearly US$44.875 billion, marking the highest level since 2021 and a significant increase since President Javier Milei took office. The Central Bank's consistent intervention, including daily purchases such as US$21 million on January 5, 2026, and subsequent acquisitions of US$8 million and US$21 million on other days in January, is part of a broader strategy to stabilize the economy and manage the new exchange rate regime.

Country Risk Rating Shows Marked Improvement

Argentina's sovereign risk profile has seen a substantial positive shift. S&P Global Ratings upgraded Argentina's local currency sovereign credit ratings to 'CCC+/C' from 'SD/SD' and its long-term foreign currency sovereign credit rating to 'CCC+' from 'CCC' on December 17, 2025, with a stable outlook. Similarly, Moody's Ratings upgraded Argentina's long-term foreign currency and local currency issuer ratings to 'Caa1' from 'Caa3' on July 17, 2025, changing the outlook to stable from positive. The JP Morgan EMBI+ indicator, which measures country risk, has also reflected this improvement, hovering around 575 basis points in January 2026, following a reported 10.4% decline during 2025. This reduction in country risk is seen as crucial for Argentina's potential return to international credit markets, which have been largely inaccessible since 2018.

Outlook for Economic Stability

These financial developments underscore a period of cautious optimism for Argentina's economic stability. The government's commitment to an economic adjustment program, including efforts to achieve a fiscal surplus and reduce inflation, has contributed to strengthening investor confidence. While challenges remain, the recent market rebound and improved risk ratings suggest a more favorable environment for economic recovery and potential access to external funding.