The country risk remains above 1,100 points after the electoral defeat in Buenos Aires, complicating the government's financial strategy.

The electoral shock in the province of Buenos Aires left deep scars on the financial markets. The country risk climbed to 1,108 basis points, its highest level in almost a year , reflecting the confidence boost generated by the defeat of La Libertad Avanza against the Kirchners by more than 13 points.

The sharp drop in dollar-denominated sovereign bonds on Monday—with losses of up to 12%—led to a slight technical rebound on Tuesday, averaging 2.2%, insufficient to dissipate the tension. The JP Morgan index, which measures the spread against US Treasury bonds, once again reached a dangerous ceiling amid growing doubts about Argentina's external financing capacity.

Analysts agree that the election results fueled fears about President Javier Milei 's ability to further his economic reform program. " Domestic assets are trying to catch their breath, but the reaction could be merely tactical if the political landscape doesn't improve ," warned Gustavo Ber , an economist at Estudio Ber.

Meanwhile, Ignacio Morales , CIO of Wise Capital, noted that Milei "is going to have to work hard" and that the rollover of the foreign debt " is difficult to imagine under these conditions ." In his view, the reopening of dialogue with governors carries more political weight in the run-up to October than any real capacity to improve financial prospects in the short term.

The external front also raised alarm bells. Brian Torchia of Pgk Consultores detailed that international reserves fell nearly USD 2 billion in one month, specifically from USD 42.72 billion at the beginning of August to USD 40.741 billion as of September 8. Much of this decline was linked to the Treasury's interventions in the foreign exchange market, which consumed around USD 500 million.

Portfolio Personal Inversiones warned that between September and November, Argentina faces over $2.1 billion in debt due to international organizations and the IMF. Furthermore, a large portion of the BCRA's liquidity comes from dollar-denominated deposits . This reduces the effective "firepower" to just $5 billion.

Despite the pressure, the dollar remained stable. The currency closed at $1.425 at Banco Nación and $1.416.50 on the wholesale market . This represents an increase of $61.50 in just two days, a figure much higher than last week's. The blue dollar remained at $1.385, the lowest exchange rate against financial dollars, which also fell slightly.

Meanwhile, the S&P Merval index fell 0.3% to close at 1,728,447 points, following a drop of more than 13% on Monday. Among the stocks listed on Wall Street (ADRs), declines predominated, although Pampa Energía (+3.9%) and YPF (+2.8%) gained the most.

SBS Group chief economist Juan Manuel Franco emphasized that the government faces "a context of negative net reserves." And it faces an increasingly limited scope for implementing contractionary measures without further damaging economic activity. In this context, the decision on how to manage the exchange rate and the monetary program becomes crucial until the national elections.

President Javier Milei, for his part, reaffirmed that there will be no deviation from the course agreed upon with the IMF . Fiscal balance, monetary discipline, and the continuation of the exchange rate band system. For the ruling party, the signal is clear: the current instability is a consequence of the election results and the Kirchner administration's resistance to reforms. And not of the economic policy that managed to lower inflation and stabilize the macroeconomic situation in the first months of the year.