Argentina asks International Monetary Fund for early release of US$50 billion credit line

Argentina asks International Monetary Fund for early release of US$50 billion credit line

"Investors are increasingly concerned Latin America's third-largest economy could soon default as it struggles to repay heavy government borrowing". It closed at a record low of 34.10 per United States dollar and is down more than 45.3 percent against the greenback this year, prompting massive central bank interventions. That could hurt Macri's re-election prospects in next year's presidential race.

The central bank issued a statement saying it called a special meeting of its monetary policy committee, which voted unanimously to hike its key interest rate "in response to the foreign exchange rate situation and the risk of greater inflation".

President Mauricio Macri has asked the International Monetary Fund for an advance on a $50bn bailout loan. As part of the deal, Argentina's government pledged to speed up plans to reduce the fiscal deficit.

"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.

U.S. Treasury yields fell further on Thursday as investors moved to safe havens following the report of Trump's tariffs plan and the Argentine peso's tumble. 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. It is the worst-performing emerging market currency of 2018. She said that the "more adverse global market conditions" had not been "fully anticipated" when the IMF and Argentina reached the deal in June.

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Government spending reductions face opposition from Argentines reeling from cuts in public utility subsidies, a move that has pushed home heating, electricity and water bills higher.

"I do not have enough to make ends meet, so imagine people who make less than me", said bank worker Julio Varela.

Despite the growing social pressures, Macri's Cabinet chief, Marcos Pena, told reporters on Thursday that the government would "find ways to hasten the fiscal tightening process". It estimates gross domestic product will contract by 1% next year, compared with previous expectations for a 3% expansion.

Argentina's biggest labor group, the CGT, said on Wednesday it will call a 24-hour general strike on September 25 to protest Macri's belt-tightening measures.

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