Wednesday, July 17, 2024

ECONOMY | 20-04-2023 20:57

Fernández, Massa put on united front in bid to reassure markets

President Alberto Fernández and Economy Minister Sergio Massa look to turn the page after week of political and financial instability.

President Alberto Fernández and Economy Minister Sergio Massa are putting on a united front, seeking to quash rumours of unrest within Argentina’s government after a turbulent few days.

The two leaders shared a meeting at the Quinta de Olivos presidential residence on Thursday at which they discussed recent financial instability, policies and measures to help the most vulnerable and details of negotiations with the International Monetary Fund over Argentina’s US$44.5-billion debt programme.

Now that the IMF has agreed to open talks over the revision of targets outlined in the record debt deal, Massa is seeking to lower goals for the accumulation of Central Bank reserves and fiscal deficit. He is also seeking to bring forward all the year’s IMF remittances for the year.

Officials briefed anonymously that the meeting was an attempt to reassure markets about the government’s direction and reiterate that Massa has the president’s confidence after rumours of his departure from the Cabinet dominated the week.

Yet as the duo spoke, Argentina’s peso continued to weaken heavily against the dollar on parallel unofficial exchange rates. The so-called ‘dólar blue’ (or “blue dollar”) ran as high as 440 pesos per greenback, rising for a fourth consecutive day.

The financial turmoil underlines the challenges facing the government, which is attempting to deal with the impact of a punishing drought on the country’s economy – and Central Bank reserves.

In addition to exchange-rate tensions, the government’s new ‘dólar soja’ scheme is falling to bring in vital foreign currency to boost Central Bank reserves. 

Thursday’s meeting between Fernández and Massa took place less than 48 hours after the surprise resignation of the president's chief adviser, Antonio Aracre.

The former Syngenta CEO decided to step down amid financial turmoil, after rumours began circulating that he would replace Massa at the head of the economic portfolio. 

The government quickly denied those rumours but to little avail, with the peso’s weakening against the dollar exacerbated by the alleged plan.

Massa later met with Central Bank governor Miguel Ángel Pesce in order to discuss how to halt the outflow of vital reserves.



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