UPDATE 1-Argentine central bank chief Sandleris to step down as new government readies

Argentina's central bank chief Guido Sandleris said on Wednesday he would leave his post next week when President-elect Alberto Fernandez comes into power, an expected move that underscores shifts taking place in Latin America's third-largest economy. Sandleris, speaking at a news conference in the capital city Buenos Aires, said he would leave his position on Dec. 10, the day Fernandez will be sworn into office.

Argentina's incoming Peronist government faces a major test to right an economy that has been mired in recession for much of the last year, grappling with soaring inflation, rising poverty and interest rates above 60%. Sandleris said Argentina's economic situation was worse than had been expected, adding that he was frustrated over not reaching a consensus on "how to build a healthy currency."

The peso has sunk since last year and annual inflation is over 50%. Argentina's fiscal deficit this year would be close to 0.5% of gross domestic product, he said, an earlier agreed target.

Sandleris, who holds a doctorate in economics from Columbia University, had been in his role since September 2018. He previously served as an economic policy secretary under outgoing conservative President Mauricio Macri. One source with knowledge of the matter and some domestic media outlets have said that Miguel Angel Pesce, an economist, is Fernandez's most likely pick to take over from Sandleris as a central bank president.

The peso currency further spiraled after an August primary election, which prompted the central bank to burn up billions in reserves to stem the decline. The government ultimately imposed currency controls to protect the reserves.