Argentina’s markets react negatively to new economy minister
RIO DE JANEIRO, BRAZIL – The Buenos Aires Stock Exchange opened Monday with a loss of 2.55%. The Argentine peso intensified its depreciation against the dollar in the informal market following the appointment of Silvina Batakis, a representative of the leftist government’s ultra-left, as economy minister.
Stocks traded on the Buenos Aires Stock Exchange opened with a decline of 2.55% and a lower volume of business on a day when the New York Stock Exchange was not active due to a holiday in the United States.
In the informal foreign exchange market, the Argentine currency traded as high as 280 pesos per U.S. dollar, up from 239 pesos last Friday.
The parallel or “blue” market is marginal in trading volume but represents a thermometer of exchange rate expectations.
The Argentine currency trades unchanged from Friday at 130 pesos per dollar in the official market.
On Saturday, Martin Guzman, the architect of Argentina’s foreign debt renegotiation, resigned from the Economy Ministry after two and a half years in the government of President Alberto Fernandez, a center-left Peronist.
The appointment of Batakis, who will take over as minister Monday afternoon, was announced Sunday.
The new minister will have to contend with galloping inflation, which is expected to rise above 60 percent this year, and demands for a budget adjustment agreed with the International Monetary Fund (IMF) following a debt refinancing of some US$44.5 billion in March.
In the first quarter, Argentina’s gross domestic product grew 6 percent from a year earlier, and unemployment was 7 percent. Poverty affects 37 percent of the 47 million population.
With information from AFP
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