The government of Mauricio Macri has sought to calm markets and boost confidence, as Argentines continue to lose purchasing power and are frustrated with layoffs, high utility rates and a spike in poverty levels, which his administration has overseen.
Argentina's peso buckled on Wednesday, setting a record low of 34.10 per USA dollar after the central bank sold reserves for a second straight day and the president asked the International Monetary Fund for early release of standby funds.
In efforts to prop up the currency the bank has sold more than $13.5 billion this year, leaving it with $54.3 billion in foreign currency reserves.
Argentina's President Mauricio Macri has asked the International Monetary Fund for an early release of funds from a $50bn deal to ease concerns that the country will not be able to meet its debt obligations for 2019. In volatile trading yesterday, ...
The peso is down larger than forty five % in opposition to the buck this year, exacerbating pre-new fears over the country's weakening economy while inflation is working at 25.4 % this year.
She said that the "more adverse global market conditions" had not been "fully anticipated" when the IMF and Argentina reached the agreement in June.
Argentina's central bank raised the benchmark interest rate to 60pc from 45pc on Thursday.
"Because the USA economy is strengthening, that is having a ripple effect in emerging markets around the world".
Everyday life is getting more expensive for Argentines, as the prices of many goods and services still bear a close relation to the U.S. dollar.
Latin America's third largest economy is facing yet another mounting financial crisis, with Argentina's currency plunging a stunning 45% against the USA dollar as the nation struggles to prop-up the failing peso.
"Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019".
A man shows Argentine pesos outside a bank in Buenos Aires' financial district, Argentina August 30, 2018.
"We have agreed with the IMF to forward all the funds necessary to guarantee compliance with next year's financial program", Macri said in a televised address.
Many also have bad memories of the International Monetary Fund and blame its free-market economic policies for contributing to the country's worst crisis in 2001-2002, when one of every five Argentines went unemployed and millions fell into poverty.
The move came just over a month after the bank switched to a monthly rate decision schedule, from twice-monthly previously.
We expect the Peso to see support eventually after the International Monetary Fund moves and the central bank action - but if the pressure on the Peso does not ease, capital controls can not be ruled out. "The closer you get to next year, that's when these will truly be felt in the pocketbook of Argentines", Osorio said. Articles appear on euronews.com for a limited time.