Argentine President Javier Milei blamed \u00abpolitical panic\u00bb for rattling markets Friday in the run-up to crucial midterm elections, sending the peso into a tailspin and hurting the country’s sovereign risk.<\/p>\n
The Central Bank intervened this week to shore up the peso, which closed at 1,515 pesos to the US dollar on Friday, breaking through the upper limit of the trading band set by the government.<\/p>\n
In an address to the stock exchange of the central city of C\u00f3rdoba, Milei blamed the Peronist opposition for creating \u00abspiralling political panic in the market and generating enormous disorganisation in terms of sovereign risk.\u00bb<\/p>\n
Defending his programme\u00a0of harsh austerity, the La Libertad Avanza\u00a0leader accused the opposition of \u00abthrowing a spanner in the works\u00bb to hurt him politically.<\/p>\n
The peso has fallen 4.48 percent in a week amid growing market jitters ahead of the October mid-terms, which could hobble President Javier Milei’s reform agenda.<\/p>\n
On Thursday night, Economy Minister Luis Caputo promised that the Central Bank would sell \u00abevery last dollar\u00bb of its reserves to save the peso from collapse.<\/p>\n
\u00abWe are not going to deviate from the programme,\u00bb he told the Carajo streaming channel.<\/p>\n
The run on the peso comes as Milei, a free-marketeer whose election was cheered by investors in 2023, struggles through the worst crisis of his presidency.<\/p>\n
His aura of electoral invincibility was shredded on September 7 by his party’s rout in the Buenos Aires Province election, seen as a test of his support ahead of the October 26 mid-terms.<\/p>\n
Milei has haemorrhaged support over a corruption scandal involving his sister and chief-of-staff, Karina Milei.<\/p>\n
Congress, meanwhile, is putting up increased resistance to his attempts to shrink the state.<\/p>\n
The lower house Chamber of Deputies on Wednesday rejected his veto of a law on funding for public universities and the country’s biggest paediatric hospital.<\/p>\n
Earlier this month, Congress overturned his veto of a law on allowances for people with disabilities.<\/p>\n
The political headwinds have caused investors to dump the peso.<\/p>\n
The Central Bank intervened on Wednesday to prop up the currency for the first time in five months.<\/p>\n
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US$432 million to prop up peso<\/strong><\/p>\n In just two days, it sold at least US$432 million in reserves to shore up the currency.<\/p>\n Under a a US$20-billion bailout agreed with the International Monetary Fund in April, Argentina cannot sell dollar reserves until the exchange rate reaches the upper limit of the floating band.\u00a0<\/p>\n In recent weeks, the government has used Treasury dollars to stem the peso’s depreciation.<\/p>\n The dollar-peso exchange rate is a political hot potato in Argentina, where most people save in greenbacks rather than the long-ailing peso.<\/p>\n Economists warn however that Milei is keeping the peso dangerously overvalued, damaging the competitiveness of Argentina’s exports.<\/p>\n The government, which faces debt maturities of around US$8 billion through to January, is going through its worst political moment.<\/p>\n Milei said on Friday that Argentina is \u00abvery advanced\u00bb in negotiations to receive a loan from the US Treasury, governed by his ally Donald Trump, which would allow him to increase his reserves to meet those maturities.<\/p>\n \u2018It’s a matter of time,\u2019 the Argentine president told local newspaper La Voz<\/em>.<\/p>\n \u00a0<\/p>\n \u2013 TIMES\/AFP<\/p>\n \u00a0<\/p>\n \t\t\t\t\t\t\t\t) \t\t\t\t\t\t\t\t<\/p>\nrelated news<\/h6>\n<\/p>\n<\/section>\n
\n\t\t\t\t\t\t\t\t\targentina, economy, president, milei, speech, c\u00f3rdoba, <\/p>\n