Argentina

The Argentine opposition candidate, Alberto Fernandez, said that the country would struggle under present conditions to repay a loan to the International Monetary Fund and he would seek to renegotiate the repayment terms, according to an interview published on Sunday by the newspaper Clarin, Reuters reported. “I would say that there is only one incontrovertible reality and that is that Argentina in these conditions is not able to repay the debts it took on,” said Fernandez, the favorite to win the October elections.

In a related story, Bloomberg News reported that Argentina’s century bonds may have been in the spotlight as the country’s assets tumbled this week, but there’s another 100-mark looming: the yield on its domestic securities. Peso bonds have lost almost half their value in dollar terms since President Mauricio Macri’s defeat in last weekend’s primary election, which sparked fears that populist opposition leader Alberto Fernandez will defeat him in the main vote in October. Prices on short-dated securities maturing in November next year have collapsed to 63 cents, equating to a yield of 89%.

Over the last 70 years, Argentina has endured hyperinflation, government collapse, and the world’s largest sovereign debt default. It’s spent a third of that time in recession, a record that almost deserves its own chapter in economic textbooks, Bloomberg Businessweek reported. And yet even the embattled Buenos Aires stock exchange had never experienced anything like the 48% plunge it took on Aug.

Argentina’s peso resumed its slide on Wednesday as President Mauricio Macri announced a raft of emergency measures aimed at providing relief to a population suffering from the impact of a sharp devaluation following his stunning defeat in primary elections, the Financial Times reported. The measures, which will cost $740m, included increases in the minimum wage, loans for small and medium-sized businesses, student grants, subsidies for poor families with children and a floor for income tax, as well as a freeze on petrol prices for 90 days.

Argentina’s currency tumbled for a second day as investors remained nervous about the country’s political future and the potential return of populist policies following Mauricio Macri’s decisive loss in a presidential primary vote over the weekend, the Financial Times reported. The peso slid as much as 10 per cent, before paring some of its losses, to end the day at 55.65 pesos to the dollar. Tuesday’s drop comes after the country’s currency shed more than a fifth of its value at one point during hectic trading in the previous session.

Suddenly, fears of a full-blown financial crisis in Argentina have once again come rushing to the fore, Bloomberg News reported. In the wake of President Mauricio Macri’s stunning rout in primary elections over the weekend, investors dumped its stocks, bonds and currency en masse in a selloff that left much of Wall Street wondering whether the crisis-prone country was headed for yet another default.

The story of what came to be known as the Barings Crisis of 1890 is studied by economic historians as the biggest sovereign debt meltdown of the century, Bloomberg News reported. But for Argentines, the fallout reverberates outside the pages of textbooks; for the same elements of boom and egregious bust lie at the root of the country’s economic and political upheaval to the present day. Argentina has spent 33% of the time since 1950 in recession, according to a World Bank report released in May.

Argentine presidential candidate Alberto Fernandez said his government would stop paying interest on central bank notes if he wins this year’s elections, Bloomberg News reported. Fernandez would cease interest payments on notes known as Leliq, used to implement monetary policy, in order to raise retiree pensions by 20% once he takes office Dec. 10, according to an interview that aired Sunday. “We’re going to stop paying the interest on Leliqs that Argentines are paying for every day,” Fernandez told local outlet El Destape in an interview.

What good is it to throw a man ten feet of rope if he is drowning in 20 feet of water?” asked Kenneth Rogoff, former chief economist of the IMF, in this newspaper 15 years ago. His question still bothers the institution he used to advise. Last June the fund uncoiled its biggest-ever loan: $50bn for Argentina. Four months later it added $6bn more. It hoped its generosity would rescue Argentina and salvage its reputation in a country that regards it as complicit in the economic disasters of 2001-02. But a year later, Argentina’s economy is still far from safety. Will more rope be needed?

Argentine opposition candidate Alberto Fernandez said he won’t lead the country into default if he wins the presidential election in October, seeking to reassure investors who fear a new government might renege on its borrowings, Bloomberg News reported. “What we can guarantee is that we aren’t going to fall into a new default. I received an Argentina in default. I don’t want Argentina to fall back into that," Fernandez, 60, said in reference to his stint in Nestor Kirchner’s government at the beginning of the century when the country was emerging from a devastating debt default.