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Argentina ETFs Gain Momentum After Loan Approval

This article was originally published on ETFTrends.com.

Argentina ETFs have picked up speed, breaking above their short-term trend lines, after gaining approval for three loans totaling more than $1.8 billion.

On Friday, the Global X MSCI Argentina ETF (ARGT) was up 1.1% and the iShares MSCI Argentina and Global Exposure ETF (AGT) was 3.2% higher. Both ARGT and AGT are now trading back above their short-term trend line at the 50-day simple moving average.

Argentina's markets were strengthening after the World Bank and the Inter-American Development said they were providing the emerging economy with three loans totaling more than $1.8 billion to support the country through its financial difficulties and citizens whom are most at risk, the Associated Press reported.

The World Bank said Thursday that a first loan of $500 million will go toward the government's budget needs and a second loan of $450 million will be used to protect 250,000 at risk children by 2020.

"This support to Argentina, especially focused on the most vulnerable sectors, comes at a crucial moment for our country and is a clear sign of confidence," Nicolas Dujovne, Argentina's minister of finance, told the Associated Press.

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The Inter-American Development Bank also approved a loan for $900 million to help at least four million people.

The additional aid packages come a week after the International Monetary Fund raised a loan it had granted to Argentina in June to $56.3 billion.

However, growth may remain muted ahead as the Argentine government tightens its belt to get on the good side of the international institutions. For example, the IMF has required the government to make deeper spending cuts and increase taxes to bring its primary fiscal deficit, which is expected to hit 2.7% of GDP for 2018, to zero next year, Forbes reports.

Argentina has witnessed its peso currency experience a sharp depreciation amid double-digit inflation, with the currency losing more than half of its value against the dollar this year.

For more information on the developing economies, visit our emerging markets category.