(Reuters) - Fitch Ratings on Friday downgraded Argentina's foreign currency rating to "C" from "CCC-" after the country ordered public sector bodies to sell or exchange their holdings of 11 sovereign dollar bonds in a bid to reorganise its debt.
Inflation in Argentina has soared above 100% and its foreign reserves have dropped.
A presidential decree in the country's official gazette said on Thursday that public sector bodies would have to sell or auction five local law dollar bonds maturing between 2029 and 2041, and to swap six foreign law dollar bonds for peso debt.
The International Monetary Fund said on Thursday it was assessing Argentina's debt swap announcement in accordance with the objectives of their $44 billion debt program.
The "C" rating reflects an imminent default as the presidential order would involve one-sided exchanges and forced currency conversions, Fitch said.
The rating agency in October downgraded the country's long-term sovereign credit rating to "CCC-" from "CCC", citing deep macroeconomic imbalances and rising risks over Argentina's ability to meet future debt repayments.
Fitch affirmed Argentina's long-term local currency Issuer Default Ratings at "CCC".
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Shounak Dasgupta)