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BUENOS AIRES, March 9 (Reuters) – Argentina’s risk spread hit levels not seen since 2005 on Monday and sovereign bond prices fell more than 8% as the spread of the coronavirus hit global markets and the country is short of cash ready to restructure its high debt.
The government says it has about $ 100 billion in unsustainable debt, of which $ 44 billion is owed to the International Monetary Fund.
The Argentine potion of JP Morgan Emerging Markets Bond Index Plus rose 377 basis points to 2804 from the US Treasury safe haven paper on Monday. The last time the country’s risk spread was so large was in 2005 when it undertook to restructure bonds it had defaulted on three years earlier.
The local Merval stock index fell more than 13%, under pressure not only from the Argentine recession, high inflation and impending bond restructuring, but also from the fallout from coronaviruses.
Argentina has registered 12 confirmed cases of virus.
The global slowdown should affect the Argentine economy, which has already been beaten by an expected deterioration in trade and tourism flows to Argentine destinations, including the capital Buenos Aires and Patagonia.
Report by Hugh Bronstein and Walter Bianchi; Edited by