Left Menu
Development News Edition

Argentina presidential front-runner 'fine' with FX rate at 60 pesos to the dollar

Reuters | Buenos Aires | Updated: 15-08-2019 18:46 IST | Created: 15-08-2019 18:28 IST
Argentina presidential front-runner 'fine' with FX rate at 60 pesos to the dollar
Image Credit: Flickr

Argentina's center-left presidential front-runner Alberto Fernandez said on Thursday that he was comfortable with the current exchange rate of 60 pesos per U.S. dollar, after the currency lost about a quarter of its value in recent days.

The currency began tumbling in the wake of Fernandez's unexpectedly strong primary election showing on Sunday. Fernandez, whose running mate is former leftist President Cristina Fernandez de Kirchner, trounced center-right President Mauricio Macri, whose IMF-backed austerity measures turned off voters. "The dollar at 60 seems fine to me," Fernandez said in a local radio interview.

Nonetheless, those comments could prove awkward if the currency falls much further. The peso, which is due to begin trading at 10 a.m. local time (1300 GMT), closed down 7.14% on Wednesday at 60.2 per dollar, traders said. Argentina's lurch back into crisis comes amid widespread volatility and fears of a global recession triggered by the trade war between China and the United States and ongoing protests in Hong Kong. Emerging markets have been particularly badly hit by recent volatility in global markets.

Argentina's Merval stock index has sunk by a staggering 34.47% since Sunday. On Wednesday, Macri announced a series of welfare subsidies and tax cuts for lower-income workers, in an awkward about-turn for a president who took office in 2015 vowing to slash public subsidies and right what he called years of leftist economic mismanagement.

Macri promised to raise the minimum wage, temporarily freeze gasoline prices and increase the income tax bracket floor by 20%. The new measures, which would cost about $678 million, would allow a tax cut for two million workers worth some 2,000 pesos ($33) per month per person, the government said. In a bid to stem peso losses, the central bank sold $248 million from its reserves on Wednesday, bringing its total sales in reserve dollars to $503 million this week.

The bank has about $66 billion in reserves, of which about $20 billion are free resources that can be used to pay a debt and stabilize the peso, according to an Argentine government official. Debt payments for the remainder of 2019 are estimated between $5 billion to $10 billion, depending on Argentina's ability to roll over domestic Treasury bills, leaving a thin margin to intervene in the foreign exchange market.

There is an additional $27 billion in maturities in 2020, according to government data.


TRENDING

OPINION / BLOG / INTERVIEW

5G will be the key driving force for COVID-19 recovery: Here's how?

... ...

Canada’s COVID-19 pitfalls highlight need for integrated health information system

In the globalized world of today where outbreaks can spread far and wide within a matter of days, a global-level integrated health information system is ideal but Canadas provincial barriers show that the country lags much behind in deployi...

Pandemic must be impetus, not obstacle, for clean water access

To make matters worse, there are suspicions that the inadequacy of wastewater treatment methods in California, the rest of the USA, and indeed around the world may help to propagate the disease even more widely. ...

3D printing and the future of manufacturing post COVID-19

The on-demand, customizable, and localized manufacturing of product components facilitated by 3D printing has the potential to redefine manufacturing but there are certain technical, mechanical, and legal limitations that, unless ...

Videos

Latest News

Senior U.S. diplomat heads to Lebanon to stress need for 'urgent' reform

The No. 3 U.S. diplomat will head to Lebanon on Thursday to stress the urgent need for the country to embrace fundamental reform, the State Department said, in the aftermath of a blast that caused large-scale damage in the capital Beirut.Th...

Portland crowd disperses after confrontations at courthouse, police say

A crowd of several hundred anti-racism protesters in Portland, Oregon, some of whom set a fire and launched fireworks around the U.S. courthouse, mostly dispersed early on Thursday, police said after declaring the gathering a riot and firin...

Coronavirus curve 'frightening, not flattening': Rahul

Congress leader Rahul Gandhi on Thursday attacked the government over rising COVID-19 cases, saying the coronavirus curve is frightening, not flattening. His attack came on a day India recorded a record single-day increase of 66,999 cases, ...

Urgent need for future-ready digital health system in India: Ficci

New Delhi, Aug 13 PTI India needs a future-ready digital health system and it has become even more urgent in the wake of the COVID-19 pandemic, a whitepaper released by industry body Ficci said on Thursday. E-Pharmacy pr...

Give Feedback