The Argentine financial market faced a high demand for dollars on Wednesday after the unexpected result of the primary elections where the ultra-liberal Javier Milei won the weekend, which redoubled a context of political and economic uncertainty.
“The operating environment for banks will continue to be pressured by high volatility, increased pressure on prices and the exchange rate, record levels of interest rates, and the low level of international reserves of the Central Bank,” said Marcelo De Gruttola, responsible at Moody’s for the ratings of Argentine banks.
“The risks could challenge the stability of banks’ funding in both local and foreign currency and generate losses in their investment portfolios,” he added.
Still, the situation is offset by banks’ ample capital and liquidity levels, De Gruttola said, while the risk to loan books is contained.