Argentina’s government is offering the first official guarantee of its government bond rating as it seeks to recover from the global economic shock.
The announcement came after Argentina’s central bank on Thursday downgraded the country’s credit rating to Baa3 from Aaa3, marking the first time the central bank has given a guarantee to an issuer of a bond rating.
Argentina is seeking a credit rating of Baa2, the highest possible level, from Moody’s Investors Service.
A Baa rating would mean that the country could not pay interest on its debt, and Moody’s expects it to be in default by the end of the year.
Argentina’s new president, Mauricio Macri, has promised to address the countrys financial problems by taking steps to stabilize the economy, which has been hit by a sharp drop in commodity prices and falling inflation.
But the new government has faced criticism for its austerity measures, which are seen as hurting the country and the economy as a whole.
Macri has promised new measures to revive the economy and ease the way for more foreign investment.
Argentina, which is the second-largest exporter of goods and services to the world after China, has struggled to recover after a deep recession and a global currency crisis in 2015 that has hit Argentina hard.