Fitch downgrades Argentina's sovereign credit rating 

Fitch Ratings announced on Wednesday that it downgraded Argentina’s long-term foreign-currency and local-currency issuer default ratings from CCC to CCC-. 

The downgrade reflects the "deep macroeconomic imbalances and a highly constrained external liquidity position" that are expected to affect the South American country’s ability to repay its debts in the coming years, the agency said. 

Some of the factors that are influencing the decision to downgrade include pressure on the country’s foreign reserves, record-high inflation, and slow fiscal consolidation, in addition to several financing risks and government debt sustainability risks, reported Market Watch.

Earlier this year in March, Argentina agreed to a $45 billion debt refinancing deal with the International Monetary Fund. The country had been in talks with the IMF since 2020 to refinance the country’s outstanding debt from a $58 billion loan in 2018.

"We had an unpayable debt, which left us without a present and a future. Now we have a reasonable agreement that will allow us to grow and meet our obligations through growth," Argentinian President Alberto Fernandez said in January.

The IMF’s debt refinancing deal gave the South American country four and a half years to pay back its debt. 

However, Fitch said that the country’s deal with the IMF “has not yet proven to be a strong anchor for policy improvements to build international reserves and improve prospects for recovery of market access and it is unclear if this will be possible to achieve in any outcome of upcoming 2023 elections, increasing risks of an eventual credit event.”