Argentina takes drastic measures to stabilise peso


Briefly: Argentina jacked interest rates from 91% to 97% yesterday (Monday) to tame inflation and avoid a currency crash before October’s presidential elections.

It’s now going through its worst economic crisis in decades:

  • 📈 Inflation is above 108%
  • 📉 The peso has lost 35% of its value against the dollar this year, and
  • 🐌 Its GDP is set to grow by just 0.2% this year, according to the IMF

In sum, the country’s economic Aires aren’t exactly Buenos right now. And that’s making life pretty tough for Argentina’s 46 million people.

Intrigue’s take: Hiking interest rates by 600 basis points isn’t typically part of most re-election campaigns, but Argentina doesn’t have many options. The IMF is already disbursing a $44B bailout it previously agreed with Argentina, and China has already entered into a currency swap.

So if these new sky-high interest rates don’t cool off the country’s red-hot inflation, it’s hard to see what else will.

Also worth noting:

  • The 97% interest rate in Argentina compares with 6.5% in India, 5.25% in the US, and 3.75% in Europe.
  • Libertarian and outsider presidential candidate Javier Milei is leading in some polls. He’s campaigning to curtail state intervention in Argentina’s economy and replace the peso with the US dollar.
Latest Author Articles
What we know (and don’t know) about Russia’s anti-satellite weapon system

Folks in Washington are abuzz right now – here’s why.

16 February, 2024
Latin America dominates world metals

In amongst all the other headlines, it’s easy to miss what’s happening right now in a critical sector (metals) across a fast-moving region (Latin America).

15 February, 2024
China stares down the barrel of deflation

China’s Consumer Price Index (CPI) fell by 0.8% year-on-year in January, the biggest single drop in 15 years and the fourth straight month of these declines, according to new figures. The country’s producer price index, which tracks the prices of products right off the assembly line, also showed declines.

9 February, 2024
The EU curbs its green policies after pressure from farmers

European Commission President Ursula von der Leyen announced yesterday (Tuesday) she’ll withdraw plans to halve the use of chemical pesticides by 2030, following weeks of widespread protests by EU farmers.

7 February, 2024