Argentina's peso tumbled 7.6 percent against the USA dollar despite the central bank's heavily selling reserves for a second day on Wednesday after the president asked the International Monetary Fund for early release of standby funds, shaking investors' confidence. The Argentine peso closed at a record low of 39.25 per United States dollar. The crisis 17 years ago resulted in one of every five Argentines being unemployed, millions sliding into poverty and some reporting going hungry. The peso is down 40 percent this year against the dollar - the worst-performing currency in emerging markets. He said the decision sought to dispel any uncertainty, but he did not specify the amount or when the funds would be released.
"Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019", Macri said in a televised address.
The IMF managing director clearly stated her support yesterday in a public statement and hence we expect the IMF to act sooner rather than later.
The IMF said hours later that it was considering speeding up payments because of the financial meltdown, but that Argentina needed to adopt stronger fiscal and monetary policies.
Then in December, officials announced a rise in the inflation target, which caused investors to begin doubting Macri's commitment to taming price rises.More news: Meghan Markle health fears: Fans anxious after latest pictures
"The market is saying: 'Just the fact that you are engaging in this conversation makes me very, very nervous, '" Daniel Osorio, president of New York-based consultancy Andean Capital Advisors, said in a telephone interview.
Argentina's currency fell precipitously on Thursday, losing more than 20 percent of its value against the dollar, despite efforts by the government to calm the markets and a move by the Central Bank that raised interest rates by 15 percent.
The economy contracted 6.7 percent in June, the third month in a row of negative growth, and the annual growth rate was a negative 0.6 percent.
The political fortunes of Macri, who until recently had been expected to easily win re-election late next year, may also be waning.
The Argentine peso crashed to document lows on the guidelines.More news: Google releases Titan Security Key
Argentina has already agreed with the International Monetary Fund to cut its fiscal deficit from 3.7 percent of gross domestic product past year to 2.7 percent in 2018 and 1.3 percent in 2019.
Macri did not say how much he had requested from the Fund. IMF economists and technicians are in Argentina this week in meetings with government members to review portions of the agreement.
Marcos Pena, President Macri's cabinet chief, denied that the government was facing an economic disaster.
"I think today's interest hike announcement will do nothing but leave investors even more jittery", said Monica de Bolle, senior fellow at the Peterson Institute for International Economics. Two smaller union groupings said they will go on a 36-hour strike on September 24 to protest the International Monetary Fund, which many blame for the 2002 crisis.More news: Trump says civilian government employees won't receive raises in 2019