"Argentina's markets have tumbled, with the peso currency at a historic low, after a heavy defeat for President Javier Milei's party at the hands of the Peronist opposition at local elections stoked worries about the government's ability to implement its economic reform agenda. On Monday, the peso was last down almost 5 percent against the US dollar at 1,434 per greenback while the benchmark stock index fell 10.5 percent, and an index of Argentine stocks traded on United States exchanges lost more than 15 percent."
"The government now faces the difficult choice of whether to allow the peso to depreciate ahead of next month's midterms or spend its foreign exchange reserves to intervene in the FX market, according to Pramol Dhawan, head of EM portfolio management at Pimco. Opting for intervention would likely prove counterproductive, as it risks derailing the IMF programme and diminishing the country's prospects for future market access to refinance external debt, Dhawan said via email, referring to the International Monetary Fund (IMF)."
Peronist electoral gains produced sharp market losses and raised doubts about the government's ability to carry out planned economic reforms. The peso slid to around 1,434 per US dollar, falling almost 5 percent, while the Buenos Aires benchmark stock index plunged about 10.5 percent and Argentine shares listed in the United States fell over 15 percent. Some international bonds experienced their largest declines since 2020 after a $65bn restructuring. The government faces a choice between allowing further depreciation or spending foreign reserves to defend the currency, a decision that could undermine IMF support and raise default risk.
Read at www.aljazeera.com
Unable to calculate read time
Collection
[
|
...
]