Argentine bonds rallied the most in emerging markets after the government unveiled a new inflation index that marks the most concrete sign it’s ready to move away from policies that have alienated investors for a decade.
Argentina, seeking to rebuild relations with foreign investors, will unveil a new consumer price index this week that probably will acknowledge something the government has denied for seven years: that it systematically underestimated inflation.
A final accord on Argentina’s debt with the Paris Club group of creditors could take months to negotiate and wouldn’t place the country’s economic growth and social programs at risk, Economy Minister Axel Kicillof said.
Argentina formally presented an offer to settle about $10 billion it owes to the Paris Club of creditors, 13 years after the country’s record $95 billion debt default, the spokeswoman for the group of creditors said.
Argentina’s economic disarray has played a leading role in turning investors against emerging markets in recent days. Multiple policy errors and the prospect of tighter U.S. monetary policy fueled a surge of pessimism that drove down the peso and overwhelmed the government’s currency controls. The administration of President Cristina Fernandez de Kirchner announced a loosening of those restrictions Friday: She had no choice.
Argentina scrapped some of its currency controls a day after devaluing the peso as policy makers sought to stem a financial crisis and restore investor confidence by reversing measures that drove foreign reserves to a seven-year low.