2023-08-14 19:44:30
Vendors in Buenos Aires
Extremely high inflation in Argentina is weighing on consumers.
(Photo: dpa)
Buenos Aires Argentina’s central bank is taking crisis measures in response to the rise of a libertarian presidential candidate that has rattled the stock market. The central bank in the country stricken by a chronic economic crisis devalued the peso by almost 18 percent on Monday. In addition, it increased the key interest rate to 118 from the last 97 percent.
The reason for this is the surprising success of the libertarian economist Javier Milei in the primaries on Sunday, who wants to seize power with his party La Libertad Avanza in the fall.
He has alarmed investors with radical recipes against the crisis: If he is elected President, Milei wants to align the economy with the dollar and abolish the central bank.
In Argentina, voting is compulsory for the primaries. So it is practically a dress rehearsal and an important step for the parliamentary and presidential elections on October 22nd. The stock exchange in Buenos Aires fell by 3.5 percent in early trading.
The local currency, the peso, began to plummet. The official exchange rate will be fixed at 350 pesos per dollar until the October elections, the central bank said. The third largest economy in Latin America is struggling with a severe economic crisis, with rapidly increasing inflation and dwindling central bank reserves.
Because of the economic misery, many Argentines have turned their backs on the big parties. This paved the way for a surprise success for the libertarians who want to roll back the state. The centre-left government has been penalized for high inflation and the rise in the cost of living.
Milei had railed against the “caste” of the political elite with populist tones and a similar tongue-lashing as ex-US President Donald Trump in the election campaign, which he dubbed “robbers” who stole the voters’ money.
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