Moody’s, one of the world’s main credit rating agencies, has raised Argentina’s local and foreign currency ceilings. The local currency ceiling went from B3 to Caa1, and the foreign currency ceiling went from Caa1 to Caa3, the agency said in a Wednesday report.

A spokesperson for Moody’s Ratings told the Herald the agency did not upgrade Argentina’s sovereign rating, as some publications reported, but rather the country ceilings. Country ceilings set a limit to the maximum rating that issuers other than the sovereign (such as companies and banks) can access within the country. 

“The decision implies an improvement for other issuers’ borrowing conditions, not a change for the sovereign,” the spokesperson said.

In the report, Moody’s said its decision reflects “the increased predictability and the greater consistency in economic policy that has led to a rapid reduction in monetary and fiscal imbalances that were stoking very high inflation.”

The agency praised the administration of President Javier Milei for its policies to “unwind restrictions on cross-border payments and foreign exchange convertibility.” The report said that those measures increased the availability of foreign currency liquidity in the country, although it warned of the “low capital account openness.”

Moody’s also said that the government’s policy had shifted towards “a reduced role of the State in the economy and less interventionist policies.” Those policies suggest a lower “likelihood of transfer and convertibility risks in the event of a sovereign default,” according to the agency.

The government is due to pay debt maturities for US$4.7 billion on Thursday, corresponding to the principal and interest payments of bonds restructured in 2020 — the AL30, AL29, GD30, GD29, and AE38 bonds. Early in 2024, the Economy Ministry announced it would go through with the payments.

This story has been updated to clarify that Moody’s has updated Argentina’s local and foreign currency ceiling, but not its sovereign debt score