Last year, Argentina was a favorite destination for investors. This year, Argentina is facing yet another currency crisis.
A run on the Peso started last month as investors soured on the country. To combat the run, the Argentine central bank hiked rates to 40%.
“The market has been in total panic mode the last few days,” said Brendan Murphy, head of global and multisector fixed income at BNY Mellon Asset Management North America.
The declines are the latest sign that rising U.S. interest rates and a strengthening dollar are prompting investors to pull money out of some of the world’s riskiest markets, especially those with the largest trade and budget deficits.
Other higher-risk markets like Indonesia and Turkey also have suffered big declines in recent days. Standard & Poor’s Global Ratings on Tuesday cut Turkey’s sovereign-debt rating further into junk, citing the country’s debt, rising inflation and volatile currency. Turkey’s main stock market has fallen 4.7% last week, while its currency has declined 4.4%. Indonesia’s JSX Composite Index slumped 6.6% the week ending April 27—the most of any major index globally, according to FactSet—when foreigners fled the market.
Argentina Calls IMF
Once again, Argentina finds itself in a currency crisis. Reuters reports Argentina president says seeking financing from IMF.
“Just a few minutes ago I spoke with Director Christine Lagarde, and she confirmed we would start working on an agreement today,” Argentina’s President Mauricio Macri said in an address to the nation.
Argentine Inflation
$30 Billion Needed
Honey, the IMF is Here
Mike “Mish” Shedlock
It seemed like Macri was on the right track. They ought to dollarize. If you don’t have the dollars, you can’t spend them.
And rising
Global debt 233 trillion +
Mauricio Macri is the president of Argentina, he ( not she) is a former Civil Engineer, you might be mixing with another country.
They could …. but that’s no fun. And it restricts the ability of those in charge to help themselves to the contents of the country’s modest slush-fund. Mr Macri is determined to have a bigger Swiss bank account than de Kirchner.
This is all right out of the book, “The Creature from Jekyll Island.”
And here’s the script for their IMF pitch: It’s not our fault this time, guys. The Fed held rates so low for so long that even we could float 100 year bonds; How could we resist?
Unfortunately, yes, then further down the G numbers. Starts at the margin and works inwards.
Argentina elected a soap opera actress to be their president, TWICE. People get what they deserve.
Cue the current crop of Peronists and coach them all on the wicked foreign capitalist pitch…oops! Hold off until we’ve got these IMF idiots in tow. How’d we end up busted here this close to our last default? Somebody’s got some splainin’ to do…
Must be time for the US/NATO to organise a regime change.
Hey, if Argentina can do it the USA can do it in spades!
Pay attention everyone; this is us without reserve currency status.
Coming soon to a G-20 country near you. It’s o
nly a matter of time.
The government of Argentina could also spend less, balance their budgets and back their currency with something tangible…