Argentina’s EMBI index, which measures the possibility of a country defaulting on its debt, ticked down to 984 basis points on Friday. It’s the first time the indicator has been below 1,000 points since August 2019.

The EMBI index, the main country risk indicator worldwide, is calculated by JP Morgan Chase. It was 1,920 points when Javier Milei took office and had been dropping since the beginning of October. On Wednesday, it went down to 1,103 points and dropped to 984 on Friday.

Analysts said the drop was due to the government securing a somewhat stable macroeconomy and international lending institutions securing loans for the country.

“Lowering country risk is fundamental for companies to have access to credit and invest in the country, generating more jobs and better pay!” posted Economy Ministry advisor Felipe Núñez on X.

Gustavo Quintana, an analyst and broker for PR Corredores de Cambio, said that the decline was the result of several factors coming together. These include the evolution of the macroeconomic situation, good reports from international consultancies, and Economy Minister Luis Caputo’s Thursday meeting with the International Monetary Fund (IMF)’s head, Kristalina Georgieva, in Washington DC.

Georgieva called the conversation with the minister “very good” and welcomed the government’s “progress in stabilizing its economy while supporting those most in need.”

“The IMF continues to work with Argentina on a path to a more prosperous economy for all Argentines,” Georgieva added.

The previous day, the World Bank and the Inter-American Development Bank granted US$8.8 billion to Argentina’s public and private sectors.

“There are incentives to buy Argentine securities and that makes the country risk fall. However, we have to be careful — things are still volatile and this may change,” Quintana told the Herald.

Pablo Repetto, head of research of the Aurum Valores broker, added that the government is obtaining US dollars through its tax amnesty program and that the Central Bank has been consistently buying foreign currency to strengthen its international reserves. 

“We are still far behind other countries in the region with worse fiscal performance but better credit ratings, basically because we tend to default debt easily,” Repetto told the Herald. “As long as there’s less of a perception that there’s a risk of [debt] restructuring, country risk could keep adjusting downwards,” he added.

The government’s focus on a fiscal anchor and disinflation are increasingly tempting investors, helped along by greater appetite for global risk, according to financial analyst Gustavo Ber. 

He said that if that “positive dynamic” carried on it could eventually open the door for Argentina to access international markets again, an option that has been ruled out since 2019.