ZCZC
BCN-06
ARGENTINA-ECONOMY-CURRENCY
Argentine peso halts slide, closes up more than 4%
BUENOS AIRES, Aug 16, 2019 (AFP) – Argentina’s peso halted its slide
Thursday, closing up more than four percent following three days of sharp
declines as President Mauricio Macri grappled with a crushing political
defeat.
The rebound, which left the peso at 59.72 to the dollar, came after both
Macri and the center-left opposition candidate who trounced him in Sunday’s
primaries, Alberto Fernandez, called for calm.
The peso had slipped to 62.18 to the dollar at the close on Wednesday
having closed at 46.55 on Friday.
Buenos Aires’ Stock Exchange rose 3.74 percent, after rebounding 10
percent on Tuesday, clawing back some of Monday’s losses when it plummeted 38
percent as the markets reacted to the news of Macri’s shock poll defeat.
Fernandez, now the favorite to unseat Macri in October’s presidential
election, said his economic policy did not contemplate a debt default.
On Thursday, Fernandez said he considered an exchange rate of 60 pesos to
the dollar as “reasonable” and said it should no longer fluctuate wildly.
Macri suffered a resounding defeat in Sunday’s nationwide primaries,
signaling a loss of public confidence in his IMF-backed austerity measures
with just months to go before October presidential elections.
Center-right Macri polled just 32 percent of the total votes cast compared
to Peronist candidate Fernandez’s 47 percent, leaving the center-left
candidate as the overwhelming favorite in the race.
The results sent the currency and stock markets tumbling on Monday, with
the peso losing more than a quarter of its value over three days.
As the Buenos Aires stock exchange reeled, on Wall Street shares in
Argentine companies plummeted more than 50 percent and Argentine bonds were
down 20 percent.
Macri reacted on Wednesday by announcing salary hikes and tax cuts to win
back voters while calling for “dialogue” with the opposition to “convey peace
of mind in this electoral process.”
Macri later tweeted that he and Fernandez met and pledged to work together
to ensure the economy is affected “as little as possible.”
Fernandez assured markets and voters that his election as president would
“not imply the risk of default, it implies a different operating logic.”
Argentina defaulted on its debt in 2001 during the worst economic crisis
in its history.
The country is currently in a recession and posted 22 percent inflation
for the first half of the year — one of the highest rates in the world.
Poverty affects 32 percent of the population.
BSS/AFP/HR/0925