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ECONOMY | 29-08-2018 17:12

Peso slides against dollar, slumping to record low of 34.50 per greenback

The slump means the peso lost a further seven percent of its value in today's trading, which Reuters reported was the 'biggest one-day decline since the currency was allowed to float in December 2015.'

Brushing aside President Mauricio Macri's announcement earlier today that the International Monetary Fund (IMF) would speed up delivery of some of its US$50-billion stand-by agreement with his government, the peso slumped to a new record low against the dollar today, selling at 34.50 per US greenback in some City exchange houses as markets closed.

According to a survey from Argentina's Central Bank, the peso ended the day trading at 33.13 per US dollar for the buyer and at 34.40 per US dollar for the seller. The peso sold at 34.50 in Banco Nación.

The slump means the peso lost a further seven percent of its value in today's trading, which Reuters reported was the "biggest one-day decline since the currency was allowed to float in December 2015." Attempting to arrest the slump, the Central Bank has sold more than US$500 million in reserves over the last two days, including US$300 million today.

Prior to the president's announcement, Argentina's national currency had begun the day with an exchange rate of 32.15 pesos per US dollar, yet the decline continued throughout the remainder of the the day without halting.

The peso is down nearly 40 percent against the dollar this year alone.

President Macri said on Wednesday morning that his government had agreed with the IMF "to advance all necessary funds to guarantee compliance with next year's financial programme." He acknowledged that there have been "expressions of a lack of trust in the markets" about Argentina over the past week and argued the decision would dispel any uncertainty about the nation's solvency.

Reflecting wider economic unrest, the CGT umbrella union grouping today called a 24-hour general strike for Tuesday, September 25, to protest the Macri administration's austerity policies, involvement with the IMF and to demand improved offers in wage renegotiations, with inflation expected to outstrip all official predictions. 

- TIMES/AFP/NA

 

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James Grainger

James Grainger

Editor-in-Chief, Buenos Aires Times.

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