(Bloomberg) -- Argentina’s peso tumbled to a new record low Thursday as the press speculated over changes at the central bank and truck drivers went on strike. The Finance Ministry’s pledge to sell $7.5 billion to stabilize the peso has had little impact.
The peso dropped 4.6 percent to 27.2 as of 11:30 a.m. local time, bringing its decline in the past three months to 25 percent.
Authorities seem powerless to halt the slide. The central bank has sold 10 percent of its reserves in recent months and hiked rates up to 40 percent in May to support the peso. Last Thursday, the government struck an agreement with the International Monetary Fund for a $50 billion credit line, the largest in the Fund’s history, to ease investor concern about Argentina’s finances.
Concern about the central bank’s credibility, large fiscal deficits, stubbornly high inflation and rising U.S. interest rates have pushed the peso down 31 percent this year, the worst performance among major emerging markets.
(Corrects to say that Finance Ministry pledged to sell reserves in first paragraph.)
To contact the reporter on this story: Patrick Gillespie in Buenos Aires at pgillespie29@bloomberg.net
To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Philip Sanders, Matthew Bristow
©2018 Bloomberg L.P.
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