Argentina currency crisis is over, says Macri

PRESIDENT MAURICIO Macri said Wednesday that Argentina’s currency crisis is over, speaking as the country’s currency rebounded somewhat and prices for its stocks and bonds rose.

Macri announced last week that Argentina was seeking a financing deal with the International Monetary Fund, IMF, following a sharp drop in the peso. The decision brought back haunting memories for Argentines who blame the IMF for introducing policies that led to the country’s 2001 economic implosion.

Argentina was forced to impose interest rate hikes and to tighten the fiscal deficit target to try to halt the devaluation of its currency, which has lost about 25 per cent of its value in recent weeks.

The peso hit a new all-time low of 25.30 to the US dollar Monday. But it rose at 24.8 per dollar Wednesday, and Argentine stocks and bonds rose.

Macri said his government thinks it has “overcome” the turbulence over the currency. He also said he will demand “an intelligent” deal with the IMF.

“It’s important to recognise the moment of nervousness and anguish lived by a sector of the population,” Macri told reporters at the presidential palace.

“There was fear and anguish. Today, we have a different climate, but we must take a balance of what happened.”

The economic turbulence highlighted the frailty of Argentina’s economy despite austerity measures imposed by Macri, a conservative who has vowed to boost growth and curb Argentina’s high inflation.

Macri’s government has requested a “high-access standby arrangement” from the IMF to meet its debt obligations without risking a disruption of economic growth.

“With this deal, we will potentialise the future of Argentines,” Macri said.

The crisis 17 years ago resulted in one of every five Argentines being unemployed and millions sliding into poverty. The peso, which had been tied to the dollar, lost nearly 70 per cent of its value.

Many Argentines have blamed the IMF since then for its role in Argentina’s record debt default of more than US$100 billion.

A survey by Argentine pollsters D’Alessio Irol/Berensztein said 75 per cent of Argentines feel that seeking assistance from the IMF is a bad move. The survey of 1,077 people in early May had a margin of error of three percentage points.