ON JUNE 14th, a day on which the peso fell by 6.1% against the dollar, Federico Sturzenegger tendered his resignation. The president of Argentina’s central bank had little choice. He was the victim of a sustained run on the currency, which has lost more than a quarter of its value against the dollar since the end of April. Its slide had forced the central bank to raise interest rates sharply in April and May, from 27.25% to 40%, and prompted the government to seek assistance from the IMF. A $50bn credit line, announced on June 7th, was supposed to calm investors’ nerves. But the latest plunge and Mr Sturzenegger’s departure show that the turmoil is far from over.
Mr Sturzenegger is not to blame for the run on the peso. Argentina’s problems began in late April after American ten-year Treasury yields rose to 3% for the first time since 2014, prompting a widespread sell-off in emerging markets. But critics accused him of exacerbating the problem by sending confusing signals about...Continue reading
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