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Markets react badly to the appointment of Argentina’s new economy minister

#Markets #react #badly #appointment #Argentinas #economy #minister

The Argentine peso fell sharply against the US dollar on Monday following the appointment of new Economy Minister Silvina Batakis in the informal market.

The black market rate, while strictly illegally tolerated, closed at 267 pesos after closing at 239 pesos on Friday. It opened on Monday at 280 pesos.

Batakis, 53, was named new economy minister on Sunday after the shock resignation of Martin Guzman, who led Argentina’s negotiations with the International Monetary Fund to restructure $44 billion in debt repayments, the day before.

Batakis is grappling with an economic crisis where inflation has topped 60 percent over the past 12 months, the poverty rate is 37 percent and unemployment is 7 percent.

Guzman was widely credited with saving Argentina from defaulting, but the deal was deeply unpopular with many in President Alberto Fernandez’s ruling coalition, not least Vice President and former leader Cristina Kirchner.

While Guzman is a close Fernandez ally, Batakis is a staunch Peronist close to Kirchner.

Her appointment is seen as a victory for Kirchner in the power struggle with Fernandez.

Argentina has an official exchange rate that stood at 132 pesos against the US dollar and was devalued by just over a percent on Monday.

The parallel or “blue” FX market is much smaller but gives an indication of what is expected for the official market.

The Buenos Aires Stock Exchange fell more than 2.5 percent at the open but had recovered most of that by the close, when it was down 0.87 percent for the day.

Batakis, a 53-year-old economist, was economy minister for the province of Buenos Aires, the most populous and poorest in the country, from 2011 to 2015.

Her previous position was at the Interior Ministry, where she maintained a close relationship with provincial governors, who met her appointment with “general acceptance,” Cabinet Chef Juan Manzur said on Monday.

When she was Minister of Economy of Buenos Aires, her governor was Daniel Scioli, the current Minister for Productive Development, who is also a staunch Peronist.

“Silvina is a woman who is in touch with the real economy, with people who have everyday problems,” Scioli said on Monday.

On her first day at work, Batakis held a four-hour meeting with Fernandez and also met with Guzman and Central Bank Governor Miguel Pesce.

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#Markets #react #badly #appointment #Argentinas #economy #minister

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