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Argentina’s finance minister resigns after market rout

Argentina’s finance minister resigns after market rout

Nicolás Dujovne’s departure follows the crushing defeat of the ruling coalition in primary elections

Argentina’s finance minister Nicolás Dujovne resigned on Saturday after the ruling coalition’s resounding defeat in primary elections a week ago, which was seen as harsh judgment on the poor performance of the country’s economy since a currency crisis last year.

Mr Dujovne — who will be replaced by Hernán Lacunza, finance minister for the province of Buenos Aires — sent a letter to President Mauricio Macri admitting that “undoubtedly we have made mistakes”.

“I [resign] convinced that, in light of the circumstances, the administration that you lead needs a significant renewal in the economic area,” wrote Mr Dujovne. He said his resignation was consistent with a government that “listens to the people, and acts in consequence”.

The move follows the surprisingly easy victory in primary elections last Sunday for Mr Macri’s Peronist opponent, Alberto Fernández, whose running mate is former president Cristina Fernández de Kirchner, who is no relation.

The result triggered a sell-off in the markets, with the currency depreciating by 15 per cent on Monday. Bond prices plummeted and the local stock market lost 37 per cent of its value, the biggest drop in its history and one of the largest falls in any stock market in the past 70 years.

Investors, who were expecting a far closer result, fear the return of populism to Argentina, a potential debt default and the collapse of an IMF programme, after the fund came to the country’s

of the next tranche of its programme rescue with a $57bn bailout during last year’s currency crisis.

A cabinet reshuffle had been rumoured for several days. Mr Macri announced an economic package on Wednesday in a bid to alleviate the economic plight of Argentines, offering tax breaks, increased subsidies and loans for small businesses.

The 50-year-old Mr Lacunza, who is a keen football player, was chief economist at the central bank from 2005 to 2010, and later became the general manager of the Bank of the City of Buenos Aires in 2013, before becoming economy minister for the government of the province of Buenos Aires in 2015, when Mr Macri was elected president.

One of Mr Lacunza’s greatest responsibilities as Argentina’s new finance minister will be to continue negotiations with the IMF, which is due to approve the disbursement of $5.4bn by the end of next month.

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