|
Argentina Peso Plunges (Further) After Central Bank Head Unexpectedly Resigns
 [Zero Hedge] One day after it emerged that the IMF's record $50 billion bailout of Argentina is just not big enough, and the country will need an additional $3-$5 billion in additional rescue funds, news which sent the Argentine Peso tumbling, moments ago the country's economic problems took another turn for the worse, when Argentine Central Bank President Luis Caputo resigned on Tuesday morning just three months after taking office, as the country slides ever deeper in an economic crisis, coupled with the collapse of its currency, which lost half of its value this year.As part of his emergency actions meant to stabilize the economy, Caputo pushed the benchmark interest rate up to 60% - despite forecasts of recession - and sold international reserves in a bid to stabilize the currency despite the IMF's warnings against. He also planned to eliminate a chunk of short-term central bank debt that had been contributing to volatility. Caputo, a former Citigroup and Deutsche Bank trader who was Argentina's former finance minister under Macri, spent the majority of his time at the bank trying to stabilize the peso which has plunged 50% in 2018, the most in emerging markets. As the FT notes, "his appointment at the time prompted some critics to question the government's commitment to strengthening the central bank's independence." As for the resignation, it couldn't have come at a worse time and follows one day after reports that Argentina was seeking even more bailout funds, suggesting that the country's "stabilization" process is not going quite as expected. To be sure there were hints that his days were numbered, because as Bloomberg's Seb Boyd writes, there were reports that he had disagreements with finance minister Nicolas Dujovne and he didn't travel to Washington with the official delegation earlier this month. However, Caputo disputed any professional reasons behind his decision, and the now former central banker said the decision was due to personal issues, according to Bloomberg... Posted by: Frank G 2018-09-25 |
| http://www.rantburg.com/poparticle.php?ID=524046 |