Argentina risk falls to 633 points on Brazil election

Argentina's country risk dropped to 633 basis points on October 5, 2026, while local shares rose as much as 6.5%. The market reaction in Buenos Aires mirrored broad gains across Brazilian financial assets following the first round of Brazil's presidential election.

In Brazil, Flávio Bolsonaro obtained 47.31% of the vote against 44.83% for Luiz Inácio Lula da Silva, sending the race to a runoff scheduled for October 25, 2026. The Brazilian real appreciated up to 4.5% against the US dollar in early trading, briefly breaking below 5 reais per dollar, while the Bovespa stock index advanced around 8%.

In Argentina, the real traded near 300 Argentine pesos, up from an implicit rate of around 292 pesos on October 2, 2026. An expense of 1,000 reais shifted from 292,000 pesos to nearly 296,000 pesos, while a 5,000 reais travel budget increased from approximately 1.46 million pesos to more than 1.52 million pesos.

The stronger Brazilian currency alters bilateral trade dynamics for Argentina, which relies on Brazil as its primary export destination. Brazil represents roughly three-quarters of the Mercosur economy and remains a key buyer of Argentine manufactured goods, motor vehicles, and wheat. Bolsonaro's campaign platform proposes eliminating at least ten ministries, setting spending caps, reducing taxes, pursuing privatizations, and exploring trade flexibilization across the bloc.