Argentina Central Bank hikes interest rate to 60%


Earlier this month, Turkey's currency crisis sent the lira to a record low against the US dollar and sparked concerns about emerging markets investments.

The Argentine currency fell again Wednesday to close at an all-time low of 34.2 pesos per USA dollar.

Argentina's Central Bank on Thursday increased its benchmark interest rate to 60 percent - the world's highest - in an effort to halt a sharp slide in the value of the peso, which plunged to a new record low.

"I know that these tumultuous situations generate anxiety among many of you", Mr. Macri said.

"We will accompany the International Monetary Fund support with all necessary fiscal efforts", said Macri, who was elected in 2015 on a free market platform after eight years of deep government intervention in the economy under previous President Cristina Fernandez. "Hyperactivity starts to look like desperation". The crisis brought high unemployment and poverty rate to the country.

Most Argentinians have bad memories of the IMF and blame the global lending institution for encouraging policies that led to the country's worst economic crisis in 2001. "The prices of everything go up on a daily basis", he said.

When Argentina's executive agreed the terms of the mortgage with the International Monetary Fund in Could maybe maybe even simply, Macri acknowledged he anticipated his country's economy would enhance and so that they did no longer view to utilize the cash. But he triggered labor unrest, when he ordered layoffs and cut utility subsidies, in an attempt to reduce the budget deficit.

If Mr. Macri was trying to calm investors, it did not work.

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The Argentinian peso depreciated at a total of 40% when compared to the USA dollar this year.

But that measure didn't stop the fall as the peso ended the day down 13.5 per cent. Dozens died in protests and looting in December 2001 as the economy unraveled and Argentina eventually suffered a record $100 billion debt default. -Chinese trade dispute will intensify, while economic turmoil in Argentina and Turkey sent those countries' currencies tumbling.

The IMF's backing alone failed to bolster the currency, which has lost more than 45 percent of its value against the dollar since the beginning of the year.

A woman walks past a wall spray painted with a message that reads in Spanish: "Macri lies" in reference to the country's president, Mauricio Marci, in Buenos Aires, Argentina, Thursday, Aug. 30, 2018.

The decline came despite the central bank's effort to stabilise the currency by raising a key interest rate to 60%.

Ms. Christine Lagarde, the International Monetary Fund's Managing Director, made the following statement today regarding Argentina.

Nerves are frayed in Latin America's No. 3 economy as it struggles to break free from its notorious cycle of once-a-decade financial crises.

Speaking at the opening of the Council of the Americas business chamber in Buenos Aires, Pena attributed the market volatility to Argentina's recent history.