Grain Tax Rejection Hammers Ratings

After a decisive vote by Vice President Julio Cobos overturned President Cristina Fernández' export tax bill in the senate, we believe that political uncertainly in Argentina is likely to spike in the near term. The downgrade of our short-term political risk ratings from 65.4 to 67.1 captures this uptick in short-term political risk. Over the medium to long term, the government's reaction to the defeat will be crucial in determining Argentina's political outlook, with the probability of a more confrontational or more conciliatory approach evenly weighted in our view.

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