Argentina's peso depreciated sharply against the dollar in the informal market on Monday, as investors and citizens reacted to the appointment of Silvina Batakis as economy minister.
In the informal foreign exchange market, the currency closed at 267 pesos to the US dollar, a drop on its opening surge when it touched 280 pesos to the dollar, compared to 239 pesos last Friday.
The parallel or 'blue' market is marginal in terms of trading volume but acts as a thermometer of exchange rate expectations. On the official market, the peso traded at 132.07 pesos to the dollar with a depreciation of 1.04 percent compared to 130.69 pesos on Friday.
Meanwhile, the Merval index of the Buenos Aires Stock Exchange trimmed its opening loss, when it dropped 2.55 percent, to close 0.87 percent down with a turnover of 780.2 million pesos on a day without operations in the New York Stock Exchange due to the Independence Day July 4 public holiday in the United States.
The rockiness came after Martín Guzmán, the architect of Argentina's foreign debt renegotiation who has been heavily criticised by Vice-President Cristina Fernández Kirchner, resigned as economy minister after two and a half years as a key figure in the government of President Alberto Fernández.
The appointment of Batakis – an economist who arrives reportedly backed by all three key leaders of the ruling Frente de Todos coalition – was announced on Sunday and she was sworn-in on Monday afternoon.
In the morning, the new minister spent four hours with President Fernández at the Olivos presidential residence on the outskirts of the capital. Before the inauguration ceremony, Batakis met with the head of the Central Bank (BCRA), Miguel Pesce, with whom she analysed the nation's macroeconomic and financial outlook, and then held a meeting with Guzmán.
Batakis and Pesce "agreed on the need to move forward in deepening the development of the capital market" and "shared the importance of continuing to work on a sustainable fiscal programme and the accumulation of reserves and the BCRA's support for the price of Treasury securities and bills," according to a statement from the Central Bank.
The new minister will have to contend with runaway inflation, which is projected to near 70 percent this year, amid demands for a fiscal adjustment previously agreed with the International Monetary Fund (IMF) as part of Argentina's US$44.5-billion debt refinancing programme.
In the first quarter, Argentina's gross domestic product grew six percent year-on-year and unemployment reached seven percent. Poverty currently affects 37 percent of the population.