Fitch lowers Argentina’s IDR rating two notches from CCC- to C, which is the step above bankruptcy status.
The announcement comes after Argentina ordered parts of the public sector to exchange their debts in foreign currency for their own peso, as well as exchange government securities mainly in dollars for pesos.
Fitch states that when the decision comes into force, it will lower the rating again to bankruptcy status (RD).
Argentina has explained the decision as an attempt to slow the decline of the country’s foreign exchange reserves, stabilize markets and fight inflation. In February, the inflation rate was over 100 percent, one of the highest in the world.