Argentina’s peso closed at a record low against the U.S. dollar on Wednesday as concerns about inflation and weak growth bit into market confidence in Latin America’s third-largest economy.
The peso weakened 2.85 percent to close at an all-time low 43.90 per dollar, traders said Wednesday.
The euro closed for the first time at 50.50 Argentine pesos, according to the Central Bank of Argentina (BCRA).
RELATED:
IMF Approves the Release of $10.9B to Argentina...Yet Asks for More Cuts
Argentina’s central bank and treasury have signaled a more hawkish stance over the last month, looking to tighten monetary policy in order to tame inflation and protect the peso, which analysts said should limit the recent weakness, reported the news agency Reuters.
In late 2015, Macri negotiated a US$56.3 billion standby financing deal with the International Monetary Fund. The agreement requires his government to erase its primary fiscal deficit mainly through a reduction in the budget deficit.
Macri defended his government’s monetary policy on Wednesday, telling a local radio station that the country is on course to have a record trade surplus.
“All currencies are depreciating against the dollar,” Macri said to Radio Mitre.
The devaluation of the Argentine peso occurs in spite of the effort made by the government to cut spending in order to regain market confidence.
Argentines have taken on the streets to protest these high prices around the country, especially in Buenos Aires. On Feb. 13, over a million mobilize under the "Land, Housing and Work" slogan, to denounce the government's economic policies. The IMF said that it “strongly supports the authorities’ efforts to mitigate the social impact of the needed stabilization policies.”
Argentina will hold general elections on Oct. 27.