The emergence of radical rightwing candidate Javier Milei as a serious contender to win next month’s presidential election in Argentina, has prompted hedge funds to up their wagers against the country’s bonds, according to a report by The Financial Times.
The report cites data from S&P Global Market Intelligence as showing that the value of short positions against Argentine bonds lent by international custodian banks has jumped by 25% from $25m to $41m since Milei, a self-described “anarcho-capitalist”, won a primary poll last month.
While the value may be small compared with the total level of Argentina’s debt, the increase is notable in that it comes despite the bonds already trading deep in distressed territory.
Inflation in Argentina is currently running at 113%, while the peso has lost more than half of its value over the past year.
Milei has pledged to radically cut public spending and dollarise the country’s ailing economy should he gain power.
