Argentina

Argentina's annual inflation rate shot up to 124.4% in August after a sharp devaluation of the peso currency, with a 12.4% rise in the month the fastest since 1991, which is driving a painful cost-of-living crisis in the South American country, Reuters reported. The soaring prices, which rose more than expected, are forcing hard-hit shoppers to run a daily gauntlet to find deals and cheaper options as price hikes leave big differences from one shop to the next, with scattered discounts to lure shoppers.

Argentina suffered a big legal defeat on Friday as a U.S. judge ruled that the country must pay about $16 billion to minority shareholders of YPF arising from the government’s 2012 seizure of a majority stake in the oil and gas company, Reuters reported. U.S. District Judge Loretta Preska in Manhattan ruled in favor of Burford Capital, which funded the litigation brought by shareholders Petersen Energia Inversora and Eton Park Capital Management LP, and according to court papers was entitled to a respective 70% and 75% of their damages.

Argentina’s central bank expects monthly inflation in August to have accelerated to almost double the pace of July after the government devalued the peso, two officials said in another sign the economy is quickly deteriorating, Bloomberg News reported. The central bank estimates consumer prices will increase at least 10.6% from July, the fastest monthly rate since Argentina was coming out of hyperinflation more than three decades ago, the officials said, asking not to be named citing preliminary internal high frequency data and private online researchers like PriceStats.

The International Monetary Fund’s executive board approved a $7.5 billion disbursement to Argentina on Wednesday, extending a financial lifeline to the cash-strapped government ahead of a tight presidential race, Bloomberg News reported. The cash payments are part of a refinanced $44 billion program, the lender’s largest, that endured months of negotiations amid political uncertainty and wrangling over economic policy.

Argentine Economy Minister Sergio Massa said on Tuesday that he expects the International Monetary Fund (IMF) board to approve the latest reviews of its huge loan program on Wednesday, unlocking $7.5 billion the embattled country desperately needs, Reuters reported. The board green light would come after the South American nation reached a staff-level agreement with the IMF in July to unlock the funds and complete the combined fifth and sixth reviews of its struggling $44 billion loan program.

Argentina's economy ministry will freeze domestic crude oil prices at $56 per barrel until the end of October after an agreement with the industry, to help tamp down triple-digit inflation, two oil sector sources said on Friday, Reuters reported. The agreement came after meetings on Thursday between Economy Minister Sergio Massa and executives from oil companies such as YPF and Vista. The government had also announced a freeze on domestic fuel pump prices.

Argentina is hiking interest rates and devaluing its currency in a bid to reassure markets as assets went into free fall Monday after a populist who vowed to burn down the central bank won surprisingly strong support in a primary vote, Bloomberg News reported. The government rushed to devalue its official exchange rate as much as 18% to around 350 pesos per dollar and hiked its key rate by 21 percentage points to 18% in a drastic policy shift as it runs out of funds to defend its currency.

Argentina’s best chance of making a comeback from the brink and taming spiraling inflation is the economy minister who’s overseen it all, Bloomberg News reported. Sergio Massa, who’s running for president in an October election, is one of the most pro-market politicians within the ruling leftist coalition, according to Hans Humes, a longtime investor in the nation’s sovereign bonds and the chief executive of Greylock Capital Management.

Argentina’s peso fell to a record low in the parallel market as the nation braces for volatility ahead of key primary elections Sunday, Bloomberg News reported. The parallel exchange rate, known locally as the blue-chip swap, weakened as much as 1.7% to around 591 pesos per dollar Monday. Argentina’s official exchange rate dropped as much 1.4%, the most intraday since September 2020, bringing the gap between the two to more than 109%.

Argentina's Economy Minister Sergio Massa said on Monday the country will not use "a single dollar" of its own reserves to make a $2.7 billion repayment to the International Monetary Fund (IMF) due this week, Reuters reported. Massa, who is also a presidential candidate in this October's election, said in a speech that it would be possible because of an extended swap deal with China and a new loan from the Development Bank of Latin America (CAF).