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Montevideo, September 22nd 2018 - 20:58 UTC

Argentine currency drops to a new record low of 39.90 pesos to the US dollar

Friday, September 14th 2018 - 09:28 UTC
Full article 13 comments
Dollar demand had risen on Thursday due to high liquidity sparked by an auction of treasury notes, traders said. Dollar demand had risen on Thursday due to high liquidity sparked by an auction of treasury notes, traders said.
Thousands of public school teachers and university professors marched against Macri's fiscal belt tightening plans in capital Buenos Aires on Thursday Thousands of public school teachers and university professors marched against Macri's fiscal belt tightening plans in capital Buenos Aires on Thursday

Argentina's peso currency fell 3.51% on Thursday to close at a new record low of 39.9 per U.S. dollar, as market confidence ebbs away despite President Mauricio Macri's efforts to reassure investors. Dollar demand had risen on Thursday due to high liquidity sparked by an auction of treasury notes, traders said.

Thousands of public school teachers and university professors marched against Macri's fiscal belt tightening plans in capital Buenos Aires on Thursday, saying that the administration was funding the army and police while letting education and welfare programs suffer.

Grim inflation news on Thursday also weighed on the currency, with official data showing that consumer prices grew 3.9% in August, bringing the 12-month rate to 34.4%. Educators, like other salaried workers in Argentina, say their pay packages are not keeping up with inflation, resulting in a month-by-month reduction of their purchasing power.

Education Minister Alejandro Finocchiaro told reporters on Thursday that despite the financial constrictions the government would fully fund Argentina's schools.

Investors grew concerned about Argentina's ability to honor its 2019 debt obligations earlier this year, prompting a run on the local currency that forced the government to negotiate a US$ 50 billion standby deal with the International Monetary Fund.

Targets included in the IMF agreement are being renegotiated to reflect market concerns that the government was not moving fast enough to cut its primary fiscal deficit.

Macri's administration now vows to erase the shortfall next year. His previous 2019 deficit target was 1.3% of gross domestic product. Last month, the central bank hiked its key interest rate to a record 60% to try to stabilize the peso and calm inflation. High interest rates are one of the reasons why economists expect the economy to shrink this year.

Categories: Economy, Politics, Argentina.

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  • Chicureo

    During Argentina's former corrupt kleptomaniac government, the country moved away from market oriented policies with stupid imports substitution protectionist measures with ignorant national control over its vast natural resources and completely alienating foreign investments, while continuing to avoid paying its international obligations. This while squandering its potential for growth and progress while blaming all their problems on others as Enrique wants us to believe.

    Sep 14th, 2018 - 07:59 pm +5
  • Chicureo

    Nestor Kirchner indeed received a country deep in in 2003 and in 2015 his widow left the country far deeper in debt, with a dysfunctional infrastructure and mountains of stolen cash in offshore accounts.

    Sep 14th, 2018 - 11:53 pm +5
  • chronic

    Reeeeeeeeeeeeeeeeeeeeekie:

    Please explain once again how this is a product solely of macaroni's misgovernance and how Cretina's actions in no way contributed to this calamity or why modern history isn't a harsh indictment of rg society writ large.

    Roflmao in expectation of your preposterous spontaneous regurgitation of leftist dogma.

    Sep 14th, 2018 - 01:22 pm +4
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