ARGENTINA
Go Ahead and Cry
Argentina President Mauricio Macri announced plans to deepen his austerity drive on Monday, but foreign exchange traders remain wary of an apparent disconnect between those plans and the actions of the country’s central bank.
Macri announced a wage freeze for executive branch government employees and said he will eliminate one out of every four “political positions” appointed by ministers, Reuters reported. Eliminating those posts should save the government $77 million a year.
The peso is in free fall as other emerging markets currencies soar against the dollar, however, due to growing concern that Macri is pushing the central bank to waffle in its fight against inflation, Bloomberg reported.
Last week, the central bank unexpectedly cut interest rates after Argentina increased its 2018 inflation target to 15 percent from 10 percent.
Elected in 2015 on a pro-business platform, Macri has scored a few legislative victories. But the passage of his pension reform bill last month badly damaged his approval ratings and the country’s unions oppose his plans for labor reforms.
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