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Montevideo, March 26th 2019 - 18:46 UTC

Argentina's Peso hit a record low to the dollar weakening 4%

Friday, March 8th 2019 - 08:58 UTC
Full article 4 comments
The record low stands in marked contrast to January and February when the central bank spent just shy of a billion dollars trying to weaken the peso The record low stands in marked contrast to January and February when the central bank spent just shy of a billion dollars trying to weaken the peso
The peso, which strengthened at the start of the year has lost over 11% in 2019, renewing fears after a sharp sell-off in 2018 saw the currency lose half its value The peso, which strengthened at the start of the year has lost over 11% in 2019, renewing fears after a sharp sell-off in 2018 saw the currency lose half its value

Argentina’s struggling currency hit a record low against the dollar on Thursday, weakening over 4% to close at 42.5 pesos per dollar, a challenge for President Mauricio Macri as he looks to right the economy ahead of elections in October.

The peso, which had strengthened at the start of the year, has lost over 11% in 2019, renewing fears after a sharp sell-off in 2018 saw the Argentine currency lose around half its value against the greenback.

The currency remains, however, within the limits of a non-intervention trading band agreed with the International Monetary Fund (IMF) as part of a US$ 56.3 billion deal last year. The upper limit of that band was 50.199 pesos per dollar on Thursday.

The record low stands in marked contrast to January and February when the central bank spent just shy of a billion dollars trying to weaken the peso when it strengthened outside the limit of the band.

“This is an really ugly signal (for the market),” said Federico Furiase, an Buenos Aires-based economist at consultancy Eco Go.

Argentina’s economy is shrinking and the country has one of the highest inflation rates in the world. On Wednesday, a central bank poll of economists increased their 2019 inflation forecast to 31.9%.

Analysts also see the peso weakening further to around 48 pesos per dollar by the end of the year, Goldman Sachs said in a note on Wednesday, with uncertainties about the presidential election likely to drag the currency down.

Other Latin American currencies also fell on Thursday against a stronger dollar, which hit a near three-week peak against some currencies.

Categories: Economy, Politics, Argentina.

Top Comments

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  • Zaphod Beeblebrox

    The populist government of CFK was incompetent and corrupt. Macri is arguably incompetent.

    People tend to vote for the least worst available option.

    ““Unfulfilled promises won’t affect next year’s elections,” predicts political analyst Marcos Novaro. “The peso did plummet and inflation did get out of control during 2018 but I suspect voters won’t blame Macri for that because many feel Cristina would have made an even worse job of the economy.”” https://www.theguardian.com/world/2018/dec/29/argentina-mauricio-macri-cristina-fernandez-de-kirchner-election-year

    Mar 12th, 2019 - 04:49 pm 0
  • Enrique Massot

    @ZB

    You suggest CFK is corrupt and Macri isn't.

    In Argentina, many are hoping that Macri loses the October election so that Macri can finally be prosecuted for numerous affairs of which his offshore companies and the Correo Argentino affair are just samples.

    In the meantime, heinous persecution of Cristina by rogue judge Claudio Bonadio is still to yield a conviction.

    Another thing. Macri is anything but “arguably incompetent,” as you suggest. Macri is, on his maternal side, an oligarch at heart. He does not know what is to go hungry to be day after day. The man has zero empathy and is full of contempt for the masses of the unwashed. Years ago he said the main problem in Argentina is the high labour costs. That is what he is working to correct, and he is succeeding. He had also hoped to obliterate Peronism as a political force--here is not succeeding, but he is achieving the opposed result.

    ”...voters won’t blame Macri...Cristina would have made an even worse job.”

    Denial too is bliss.

    Mar 12th, 2019 - 07:22 pm 0
  • Zaphod Beeblebrox

    “You suggest CFK is corrupt and Macri isn't.”

    I am sure Macri isn't 100% innocent but he certainly hasn't enriched himself to the obscene levels that CFK did.

    “In Argentina, many are hoping that ... Macri can finally be prosecuted for numerous affairs... In the meantime, heinous persecution of Cristina by rogue judge Claudio Bonadio is still to yield a conviction.”

    So, CFK shouldn't be prosecuted if there is evidence of corruption but Macri should be? Innocent until proven guilty in all cases, but if there is evidence of a crime it should be pursued. How exactly did CFK get so rich?

    Mar 13th, 2019 - 05:00 pm 0
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