(Bloomberg) -- Argentine President Alberto Fernandez is yet to choose his new economic chief almost 24 hours after Martin Guzman’s resignation Saturday, a shock departure that deepens the country’s financial crisis with inflation soaring and the nation’s bonds in distressed territory.

Fernandez met for hours Sunday at his residence in Olivos, outside of the capital, with Lower House Speaker Sergio Massa, who is expected to have a major influence over the decision. Fernandez’s spokeswoman said conversations are ongoing, but didn’t respond to questions about when there’d be an announcement. 

The often predictable, moderate Guzman stunned the nation Saturday afternoon, publishing a seven-page resignation letter on Twitter while Vice President Cristina Fernandez de Kirchner was at a rally event. The timing spoke to a bulging divide within the ruling coalition over the economy’s direction.

His exit further fueled doubts that the government can meet the targets of its $44 billion program with the International Monetary Fund. The program, announced in March, had to be revised in June.

Guzman’s departure “may compromise the relationship with the IMF,” said Alberto Ramos, head of Latin America research at Goldman Sachs Group Inc. “A politically weaker and unpopular presidency would increase the risk that macro policy could turn more heterodox and interventionist.”

READ MORE: Argentines Seek Hedging in Crypto After Economy Minister Resigns

Parallel Market

Argentine leaders like Fernandez often rush to replace economy ministers in a bid to stem the financial chaos. Cryptocurrency markets, the only ones open over the weekend, priced the peso as high as 279 per dollar Saturday night, an 11% jump. 

The official exchange rate -- 125 per dollar -- is cloaked in currency controls by the central bank. But the growing gap between the official and parallel rates, paired with escalating uncertainty over economic policy, could eventually force the government to devalue the official rate, something Fernandez promised he’d never do.  

Crisis-prone Argentina faces a particularly fragile moment. Inflation over 60% is at its highest level in 30 years, while nearly 40% of Argentines live in poverty. Economists forecast a recession this year. And the central bank has razor thin cash reserves to shield the peso from a currency rout.


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