Investments flow into Argentina
In a global context marked by macroeconomic and geopolitical uncertainty, Argentina’s risk premium fell steadily below 500 basis points (bps) in January 2026, according to JP Morgan’s EMBI+, closing around 480–486 bps.
The trend reflects growing confidence in the country’s stabilization program and highlights the pivotal role of the energy sector as a driver of financial inflows.
Yet international developments, such as President Donald Trump’s nomination of Kevin Warsh to succeed Jerome Powell as chair of the U.S. Federal Reserve—announced last Friday—have introduced volatility. Warsh, known for a hawkish stance favoring tighter monetary policy to curb inflation, has eased concerns over Fed independence, triggering declines in gold and silver prices (which had hit records on expectations of a weak dollar and inflationary pressures) and a modest rebound in the U.S. dollar after monthly declines. Overall trends, however, tell a more nuanced story.
Rising geopolitical tensions around Iran add further uncertainty. Threats of U.S. military intervention in response to domestic protests could disrupt flows through the Strait of Hormuz, the passage for 20% of global oil, potentially boosting energy prices. This would benefit exporters like Argentina but increase market volatility risks.
Argentina’s central bank (BCRA) has capitalized on these inflows to grow reserves at a rapid pace. In January 2026, net foreign currency purchases exceeded US$1.15–1.2 billion, closing the month around US$1.157–1.2 billion after 20 consecutive positive trading sessions. Gross reserves reached record levels since 2021, peaking at US$46.24 billion before end-of-month adjustments, with preliminary BCRA data showing final levels between US$44.5 billion and US$46.16 billion.
This increase, already exceeding 10–11% of the preannounced annual target of US$10–17 billion, is largely fueled by energy sector inflows despite debt payments and seasonal movements. Global appetite for emerging markets is moderated by external factors, but domestic dynamics compensate.
Energy leads return to international credit amid global pressures
The energy sector has consolidated its leadership in Argentina’s corporate debt market, accounting for roughly 68% of U.S. dollar-denominated bond issuances (Obligaciones Negociables, ON) between November 2025 and mid-January 2026, according to consulting data. These inflows are driven by investments in Vaca Muerta and a shift toward a more efficient energy matrix, amid global demand for high-yield emerging market assets.
International conditions, however, add complexity: Warsh’s nomination signals potentially tighter Fed policy, which could raise global interest rates and increase financing costs for emerging-market issuers.
Gold prices fell from peaks near US$5,600/oz to US$5,100/oz, while silver experienced daily drops up to 27.7%, its worst historic performance, as expectations of runaway inflation and a weak dollar faded. Meanwhile, threats around Iran—including naval deployments in the Strait of Hormuz and live-fire exercises scheduled for February—raise the risk of oil supply disruptions, potentially lifting crude prices and attracting capital to alternative energy assets such as Vaca Muerta.
In the last week of January 2026, Argentina’s energy and mining sectors showed significant progress. In Vaca Muerta, the number of active shale oil and gas operators reached a record 20 companies, the highest since development began in 2012, following a 2025 marked by acquisitions, divestments, and strategic partnerships. National oil production hit record levels in December 2025, surpassing 860,000–878,800 barrels per day, with Vaca Muerta contributing around 67–70%. Projections for 2026 point to sustained growth driven by infrastructure expansion and operational efficiency, with the formation approaching or exceeding 600,000 barrels per day in January.
In mining, record prices for key metals are driving sector growth. ArcelorMittal formalized its entry into Argentina’s mining sector through the creation of a new company for exploration and extraction. A recent study identified four critical conditions—macroeconomic stability, regulatory improvements (such as the Glaciers Law, RIGI, and provincial roles)—to multiply investment, exports, and mining employment by 2035.
The government projects that energy and mining will generate US$75 billion in exports by 2035, with a combined 33% jump in 2026. Energy companies raised more than US$10.5 billion through corporate bonds in 2025 (US$10.571 billion across 80 issuances from 28 companies, 94.2% in hard dollars, with average rates of 7.62%–10.37%), with longer tenors (average 74 months) reflecting stronger institutional appetite for medium- and long-term projects. In January 2026, this momentum intensified with issuances that both refinanced existing debt and injected fresh dollars into the local financial system.
Key deals:
- Pan American Energy (PAE): US$375 million under New York law at a fixed 7.75% annual rate, 11-year maturity (2037). This operation consolidates the record 2025 issuance total for the sector.
- YPF: Expansion of its 2034 bond with US$550 million at 8.1%, bringing the total outstanding to approximately US$1.65 billion, making it one of the most liquid Argentine corporate dollar bonds.
Other recent placements include Vista Energy (US$1.3 billion at 8.5%), Tecpetrol (US$750 million), and Pampa Energía (US$450 million), mainly refinancing late-2025 obligations. Overall, corporate bond issuances exceeded US$1.3 billion in the first weeks of 2026, with rates ranging from 7.62% to 10.37% annually, comparable to regional peers such as Ecuador.
These deals benefit from a modest U.S. dollar rebound following Warsh’s nomination, which moderates inflationary pressures, although tensions in Iran could reverse the trend, boosting energy costs and drawing capital into commodities.
The government, through BCRA, has leveraged these flows to build reserves without pressuring the official foreign exchange market (MULC). Regulations require companies to settle a portion of proceeds in the official market—up to 180 days post-issuance—helping stabilize the exchange rate gap and reduce reverse carry trade. Analysts at Puente estimate this mechanism has injected at least US$2–3 billion net into the BCRA over the past two months, easing reliance on quasi-fiscal sources and supporting sustained disinflation.
Argentina posted a record energy surplus of US$7.815 billion in 2025, with fuel and energy exports exceeding US$10 billion through November, boosting the country’s trade balance.
Currency Flexibility Spurs Refinancing
To encourage more bond issuances and optimize corporate debt maturities, the BCRA recently introduced Communication A 8390, relaxing currency controls for companies refinancing foreign debt. This measure allows early access to the MULC to prepay principal and interest on corporate bonds (ON) or external loans, provided strict conditions are met:
- Extended maturities: Refinancing must involve new loans with an average life longer than the debt being repaid, or the issuance of new bonds with equivalent or improved terms (for example, lower rates or extended maturities).
- Net currency inflow: Access is prohibited if it results in a net outflow of dollars; operations that generate additional inflows, maintaining or increasing reserve levels, are prioritized.
- Controlled exceptions: Windows are expanded for swaps or restructurings that improve the average life of debt, without prior BCRA approval, but within caps equivalent to previous regulations (such as A 7918).
This regulation not only lowers financing costs for companies—by avoiding reliance on high-cost financial dollars—but also encourages greater issuance activity in key sectors such as energy. Essentially, it acts as a multiplier: by enabling more efficient rollovers, the government promotes fresh dollar inflows without putting pressure on the exchange rate, aligning with its roadmap for a gradual easing of currency controls.
According to Morgan Stanley projections, this dynamic could add US$4–5 billion in net reserves during the first half of 2026, strengthening the Treasury’s ability to meet sovereign debt maturities without compromising stability—even in a scenario where Warsh’s Fed nomination and tensions around Iran introduce volatility in commodities and currencies.
Argentina week: Strategic window for sovereign issuance
With 2026 foreign-currency maturities totaling US$19.505 billion—peaking in July (US$4.2 billion in Bonares and Globales) and residual IMF payments—the government sees Argentina Week (March 9–11, 2026, New York) as an ideal opportunity for a modest sovereign issuance. The road show, the most ambitious in decades, will feature Finance Minister Javier Milei at the opening.
The forum is not merely a promotional showcase for a “prosperous and open Argentina”: it provides a platform to present solid fiscal metrics (sustained primary surplus, zero structural deficit) and test demand from sovereign funds, pensions, and hedge funds.
Analysts such as Daniel Marx (Quantum Finanzas) and JP Morgan representatives project that with a risk premium of 400–450 bps by March, Argentina could issue US$3–5 billion in global bonds at 8–9% yields, similar to corporate energy rates. This would extend debt maturities, capture dollars without pressuring the monetary base, and reduce risk premiums in local-dollar markets (MEP/CCL).
The government resists overreliance on Wall Street—Caputo reiterates, “We will try to avoid new debt”—favoring internal rollovers and reserve accumulation. Yet cash flow realities demand pragmatism: a successful issuance in Manhattan would not only ease the 2026 debt calendar but also set a precedent for 2027, reinforcing the narrative of macroeconomic consolidation.