Argentina’s Central Bank Lifts Policy Rate to 60%

The peso continues to be the worst-performing currency of 2018

The peso continues to be the worst-performing currency of 2018

That could hurt Macri's re-election prospects in next year's presidential race.

In a statement on Wednesday, the IMF said it would "revise the government's economic plan with a focus on better insulating Argentina from the recent shifts in global financial markets, including through stronger monetary and fiscal policies and a deepening of efforts to support the most vulnerable in society".

"Rapid adjustment will be painful, recession could be deep, and political risk will spike amid dwindling confidence at home", Fiona Mackie, regional director for Latin America and the Caribbean at the Economist Intelligence Unit, said on Twitter.

The Argentine peso tumbled again, even after the central bank hiked its benchmark interest rate by 15 percentage points to a dizzying 60 percent on Thursday in a bid to control rampant inflation and stem the currency's slide.

The surprise move, however, failed to stabilize the peso. Earlier this month, Turkey's currency crisis sent the lira to a record low against the United States dollar and sparked concerns about emerging markets investments.

"Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019", Mr Macri said. Wednesday's 7.62 percent fall in the peso was its biggest one-day decline since the currency was allowed to float in December 2015. Dujovne said he would travel to Washington on Monday evening to discuss the policies with the IMF's technical staff. The central bank raised the rate from 45 percent. Argentina has US$24.9 billion in peso and foreign currency denominated debt payments next year.

Graham: Relationship between Pres. Trump, Sessions 'beyond repair'
But McConnell outlined a busy fall agenda that did not include plans for confirming a new Trump pick at the Justice Department. But Trump has never held to others' timetables, and a signal from another Republican may indicate he doesn't need to.

A pan-European stock index closed down 0.3 percent.

Despite signing a US$50 billion standby financing deal with the International Monetary Fund earlier this year, President Mauricio Macri is struggling to convince the markets that he can spur economic growth while cutting fiscal deficits and combating inflation.

In Argentina, history is prone to repeating itself.

The dollar index rose 0.07 percent, with the euro down 0.29 percent to $1.1672. "We are struggling and I voted for Macri!"

Argentina's biggest labor group, the CGT, and other unions have called for 24- and 36-hour general strikes in late September to protest Macri's belt-tightening measures.

All that, combined with the budget cuts promised to the International Monetary Fund that will slow down public works projects, is contributing to a recession that will result in an economic contraction of 1 percent this year, according to the government.

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