Argentina

Argentina’s peso lost more than a quarter of its value against the U.S. dollar Thursday, a day after the new government of President Mauricio Macri said it would lift currency controls to attract investors and kick-start the economy, The Wall Street Journal reported. Within minutes of trading, the peso weakened to 13.9 per dollar from 9.8 the previous day, its biggest percentage decline since January 2002, following the abandonment of the peso-dollar parity.

Argentina’s new government on Wednesday lifted currency controls, allowing its citizens to buy dollars freely for the first time in four years and setting the stage for a sharp depreciation of the peso, The Wall Street Journal reported. The move, which officials hope will kick-start the faltering economy, is the strongest President Mauricio Macri has yet made in his bid to roll back the government interference that marked the country’s economy under the previous presidencies of Néstor and Cristina Kirchner.

Argentine President-elect Mauricio Macri plans to push through economic reforms that will buy him time for a "tough negotiation" with U.S. hedge funds suing the country over unpaid government debt, Bloomberg News reported. The pro-business Macri, who narrowly won Sunday's presidential election, vows to get the stalled economy moving again but needs to settle a decade-long legal battle with the holdout creditors before he can return to global credit markets.

On a cruise round the Mediterranean, Domingo Cavallo, Argentina’s economy minister in the run-up to the country’s dramatic economic collapse in 2001, was bemused when he was unable to use his credit card during a brief stop-off on Greek soil last week, the Financial Times reported.

Argentina’s thirst for dollars has been temporarily quenched by a $1.4bn bond sale but a state visit to Russia this week is unlikely to yield significant support for its languishing economy, the Financial Times reported. Hindered from issuing debt in international capital markets by a long-running dispute with a group of holdout hedge funds, Argentina succeeded in issuing dollar-denominated debt under local law on Tuesday to bolster precariously low foreign exchange reserves.

The legal feud between Argentina and a group of “holdout” creditors is inflicting collateral damage on a growing number of victims caught in the crossfire. One of the few winners from the fight might turn out to be Cristina Fernández, the country’s president, the Financial Times reported. As Argentina continues to defy US court orders to pay the holdouts after its 2001 debt default, its citizens are suffering the broader fallout of a struggling economy. Bondholders remain unpaid since the government defaulted again last year.

The nasty battle between Argentina and a group of New York hedge funds has claimed another victim: Citigroup. The bank said on Tuesday that it would shut its custody business in Argentina after a federal judge in New York last week rejected its request to lift an order that prevented the bank from making interest payments to investors holding $2.3 billion in Argentine notes, the International New York Times DealBook blog reported.

Debt-holders who want to jumpstart restructuring talks with Argentina may have to wait until a court rules next month on whether to let a disputed bond payment go through, further extending a legal feud that has hobbled state finances, Business Insider reported. The case stems from Argentina's 2002 default on about $100 billion, which has weighed on Latin America's No. 3 economy by locking it out of the global bond market at a time of stagnant growth and high inflation.

US holders of defaulted Argentine bonds have stepped up their campaign for full repayment of their loans by detailing how 14 senior Argentine officials experienced “dramatic and often unexplained increases” in their personal wealth during service in the Kirchner administrations, the Irish Times reported.

The hopes of easing a debt dispute between Argentina and a group of New York hedge funds seemed to be dashed on Monday after the country’s economy minister made an offer that appeared to fall well short of what the investors were seeking, the International New York Times DealBook blog reported. Argentina made the informal offer after a potentially onerous legal clause in its bonds ceased to apply on Dec. 31. The hedge funds, known as holdouts, had sued Argentina in the United States to get full payments on bonds that the country defaulted on in 2001.