Argentina was hit with another wave of economic turmoil today, as key indicators revealed the extent of doubts about Mauricio Macri's chances of winning re-election in October's presidential election.
In movements closely watched by both the markets and citizens, the dollar rose to 44.92 pesos per greenback, just four cents under its historical high (registered April 5), according to Central Bank data. Meanwhile, country risk rose to a whopping 945 points, a record under the Macri adminstration's time in office, reflecting doubts about the identity of Argentina's next president.
According to economist Damián Di Pace, the troubling data is a result of uncertainties held by bondholders, who are now doubting Argentina's ability to pay off its debt after the elections, should Macri's most likely rival, former president Cristina Fernández de Kirchner, win the presidential vote.
Speaking this afternoon, the president said the fears needed to be countered by his re-election in October.
"The world has doubts, and that increases the country risk," said Macri, but he argued that "the doubt is unfounded. We Argentines are not going to go back."
The economic crisis has opened the door to the possible return of Fernández de Kirchner, who initially trailed in the polls but has risen as the economic crisis bites.
“We are being invaded by the electoral process," said Macri.
The president warned Argentines that "there are no shortcuts, and there are no magic solutions" to the economic downturn.
"For the first time in decades, we are attacking the underlying problems [that provoke inflation]," Macri said.
He argued that, prior to his government, the country was lacking "a responsible policy that administers resources intelligently, in favor of people and not in favour of politics."
However, experts aren’t so sure.
"It clearly seems the election is slipping away from Macri," said Alberto Ramos, head of Latin America research at Goldman Sachs told Bloomberg earlier today. "There’s increasingly less guarantee that policy continuity will be maintained after the election, and that makes markets nervous."