MercoPress. South Atlantic News Agency

Rubinstein denies Argentina plans 50% devaluation

How much longer can the current exchange hold? Rubinstein said it was “an operation”

Argentina's Deputy Economy Minister Gabriel Rubinstein Monday denied rumors of a 50% devaluation of the local peso against the US dollar that had gone viral in Buenos Aires' financial circles.

Rubinstein's statements came after publications Sunday in the website El Cohete a la Luna, which is considered to be akin to the ruling coalition.

According to these reports, the alleged plan foresees a reduction of the exchange gap between the official dollar and the Black or blue versions from the current 111 % to 30 % and would recommend a devaluation of the official exchange rate “close to 50 %” to bring the official exchange rate to AR$ 200 from the current AR$ 138.3 and leave it fixed until March 2023.

Rubinstein assured economists through an audio message that there will be no devaluation, “at least this Thursday”, and that his plans have “nothing to do with an imminent devaluation.” The official dubbed the leak “an operation.” He is to travel alongside Superminister Sergio Massa next week to the United States for meetings with International Monetary Fund (IMF) Managing Director Kristalina Georgieva, among other officials.

Argentina is going through a fragile economic situation, with annual inflation of 71% last July, scarce international reserves, a fiscal deficit largely financed through monetary emission, and virtually no access to international credit after signing a new deal with the IMF for the repayment of US$ 45 billion.

No big announcements are expected before Massa's return from the US in mid-September.