New Argentina Treasury Minister Guarantees Peso Stability
"This is a complex situation," Hernán Lacunza told reporters moments after being sworn in as treasury minister by President Mauricio Macri. "In moments of uncertainty, stability is the most important public good."
Lacunza said his main priority will be to stabilize the peso. He also assured that Argentina would keep 2019 fiscal targets that it set out as a condition to get a record loan of more than $56 billion from the IMF to try to curb the country's economic crisis.
Conservative Macri lost in an Aug. 11 primary election by a wide margin against center-left Alberto Fernández.
Macri's loss, and fears of a potential return to interventionist policies by a leftist administration, hit markets, crashed the peso currency and sent stocks and bonds tumbling. Lacunza replaces Nicolas Dujovne, who brokered the IMF deal and who announced his resignation over the weekend.
"What matters now is that the starting point for (the next government) has a robust platform to be able to recover growth," said Lacunza, a former economy minister for Buenos Aires province.
After the defeat in the primary elections, Macri's administration announced a string of social spending measures. They included: a temporary hike of the minimum wage, reducing payroll taxes and implementing other steps to help workers as Argentina struggles to overcome galloping inflation, high unemployment and other economic woes.
Macri acted after the leftist presidential ticket that includes his predecessor, Cristina Fernández running as vice president, turned in a powerful showing in primary voting for candidates going into the Oct. 27 general elections.
The local currency depreciated slightly after Lacunza spoke to reporters on Tuesday but then bounced back to close at 55 pesos per U.S. dollar following a Monday holiday.
Central Bank Chief Guido Sandleris said that following the sharp depreciation last week, the bank will continue to intervene in the foreign exchange market to stabilize the peso whenever it's needed. He also said the financial system is solid. But he acknowledged that consumer prices will rise in the coming months following the peso depreciation.
IMF chief spokesman Gerry Rice said in a statement that the international lending institution is closely following recent developments in Argentina and are in ongoing dialogue with the authorities as they work on their policy plans to address the difficult situation that the country is facing."
Rice said an IMF team would travel to Buenos Aires soon without providing details.