The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Is Argentina headed for the rocks?

The rhetorical battle between Argentina’s government, the IMF and bondholders is heating up but the bigger – largely ignored – issue appears to be the country’s looming financial collapse.

ushuaia lighthouse 780

As the IMF negotiating team arrived in Buenos Aires on February 12, comments from the Argentine government and the central bank led to sharp price movements of the sovereign’s debt – both in hard and local currency. However, while the market’s focus is on the issues surrounding a debt relief agreement that is “sustainable”, there is a surprising lack of debate about the fact that the economy – on its current trajectory – is itself completely unsustainable and headed for a sharp crisis.

The country is already in recession and is facing a set of challenges that even orthodox economic policies would be hard pressed to meet. Meanwhile the country’s president, vice-president, economy minister and the governor of its central bank remain committed to a mix of price and capital controls to create a semblance of stability in inflation and the exchange rate.

In January, Argentine inflation surprised to the downside, coming in at a monthly rate of 2.3% and an annual rate of 52.9%. The Central Bank of Argentina (BCRA) reduced its policy rate by 400 basis points to 44%. Experts expect such containment to be short-lived and costly in the mid-term.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree