LONDON, Nov 18 (Reuters) - Argentina may see its credit rating slowly rise if the current election favourite, Mauricio Macri, wins and pushes through proposed reforms, Moody’s top Latin America analyst said on Wednesday.
Macri leads the polls in the final days before Argentina’s presidential run-off vote on Sunday, and his pro-business credentials are kindling hopes that he can pull the country back from the brink of default.
Moody’s currently rates Argentina Caa1, which signifies a substantial risk of default. But its bonds have been rallying since Macri’s surprisingly strong performance in the first round of elections.
“If Macri starts pushing for the right policies and is able to deliver them you could argue that that will improve the fundamentals,” senior Moody’s analyst Mauro Leos said at an investor day.
“Maybe that would be sufficient to remove Argentina from the Caa group. But if we move, we are going to be really cautious,” he added, saying that worries about low foreign exchange reserves were unlikely to disappear any time soon.
“It is very rare we do consecutive upgrades one year after the other. But let’s assume that could be the case, how long would it take so to get to the top of the B category. That would be uno, dos, tres, three years.”
For Moody’s to consider even more aggressive “multi-notch upgrades,” Leos said, everything would have to go almost perfectly for Macri’s reform plans, something that Argentina’s recent record makes almost unimaginable. (Reporting by Marc Jones, editing by Larry King)