Argentina’s central bank is setting a price floor under the volatile peso in hopes to avoid a sharp plunge in the currency after an opposition-won presidential election last Sunday shifted the country firmly back to the left.
The peso edged up on Thursday to 59.68 per dollar, with the central bank offering U.S. currency in the exchange market at a fixed 59.99 pesos per greenback, effectively putting a floor on the trade.
Argentina’s markets have been held in limbo following a general election on Sunday, as traders and investors await signals from President-elect Alberto Fernandez about the future direction of Latin America’s no. 3 economy.
A spokesman for the center-left Peronist leader said he would travel to Mexico on Friday and return in the middle of the following week, his first trip overseas since being elected.
Fernandez will face a full array of economic woes when he takes office in December, including protecting reserves and dealing with a looming pile of debt amid complex negotiations with creditors and the International Monetary Fund (IMF).
The President-elect will have to balance the IMF commitments while dealing with rising levels of poverty, which have risen amid the economic malaise. Protesters marched on Thursday in the centre of Buenos Aires to protest austerity measures under Macri and the IMF, with the slogan “the debt is with the people, not the IMF”.
Authorities have also been rushing to stem a sharp decline in foreign currency reserves, after spending about US$ 22 billion to defend the peso since business-friendly leader Macri was defeated heavily in an Aug. 11 primary election.