Argentine banks warn that bonds tied to inflation are no longer a business. Recession forecasts and a decline in the amount of money in circulation are leading investors to divest from inflation-linked bonds.
Argentina has been registering lower-than-expected inflation for two months, although it remains at crisis levels. A host of factors — unions, utility bills, transportation costs, education — could push inflation higher again in the coming months. The problem is that there are not many profitable alternatives to these bonds.