Stability in domestic market did not last much. Dollar climbed to ARG$3.05 and country-risk soared 4.3 per cent to 606 points. However, this index underestimates Argentina's real situation. JP Morgan, the bank that makes this estimate, only takes into account Argentine debt issued abroad (under New York rules), such as Par and Discount bonds. Since 2005, Argentina has issued its debt only in domestic market for fear of suffering seizures.
Now, if we considered Argentina's total debt, regardless of its jurisdiction and with the aim of making country-risk comparable, the result would be that such index is actually at 950 points.
This high value should not come as a surprise. Argentina has no access to international credits -only to Hugo Chávez's generosity-, and leads the ranking of the most risky bets among emerging countries. Its levels are similar to those registered in May 2001. Government has paid no real attention to the fact that many savers are still opting for taking refuge in dollar, thus reducing market liquidity.
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