Published: Mon, June 18, 2018
Business | By Tara Barton

Argentina's finance minister named new head of central bank

Argentina's finance minister named new head of central bank

Caputo and Argentina's new Treasury Minister Nicolas Dujovne replace outgoing Finance Minister Alfonso Prat-Gay who was sacked by President Mauricio Macri on Monday, Dec. 26.

"In the past few months various diverse factors have adversely affected my credibility as president of the central bank", Sturzenegger said in his resignation letter to President Mauricio Macri, which he later posted to his Twitter account.

The Argentine currency has dropped 30 percent against the dollar after a currency crisis in April and May, followed by a 8.6 percent drop this week.

Federico Sturzenegger tendered his resignation and was replaced by finance minister Luis Caputo, a government statement said. But then it sold more than $500 million on Tuesday and Wednesday before letting the peso slide 6.22 percent to a record low on Thursday and further weaken on Friday.

Economy Minister Nicolas Dujovne told reporters Friday that "work is being done to normalize the foreign exchange market" and said that the president's economic program would remain the same.

Once the loan is approved by the International Monetary Fund board on Wednesday, he said that Argentina will receive 7.5 billion dollars of the 15 million allotted for budget support.

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"With the currency weakened by 50 percent since the beginning of the year and inflationary dynamics worsening, it was hard to defend Sturzenegger".

"We are working with the new president of the central bank. on a schedule to strengthen the central bank balance sheet, replacing the central bank's papers that have very high rates and short-term maturities", he added. "We have a floating system in which the central bank can intervene", Dujovne said.

The Argentine economy climbed 2.8 percent in 2017, but growth slowed after a crisis of confidence that resulted in the loss of over $10 billion of central bank reserves.

"It must be put in the context of a global market with rising interest rates that hit us because we are among the most vulnerable countries".

"We are working to normalise the exchange market and smooth the fluctuations we have seen in the last few days, always based on the currency flotation programme", said Mr Dujovne.

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