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The agencies
Argentine President Mauricio Macri unveiled on Wednesday a package of measures to support social badistance and tax cuts paid by workers to mitigate the impact of the economic crisis in his country months before an election in which he wishes a second term, but his announcement did not immediately end the collapse of the local currency (peso).
The peso fell 12.3% at the start of Wednesday's trading session to 61 against the dollar after Macri's announcement of new moves, but has eased slightly and reduced its losses to 4 77% later in the morning.
This is the third consecutive day that the peso is suffering heavy losses because of market concerns about politicians' ability to pull Argentina out of a new wave of recession and a high inflation.
Sales of goods, such as cars, foodstuffs and cosmetics, have already slowed down due to the collapse of the peso, as suppliers disrupt their deliveries while they try to calculate the price. impact of the decline of the currency on consumer prices.
Macri said that it would increase the limit of the income tax exemption by 20%, paving the way for tax cuts for two million workers. The tax cuts would be about 2,000 additional pesos ($ 34) per month per person.
The government will give unemployed parents 1,000 pesos per child before the end of the year and raise the minimum wage for the second time this year.
"The actions I'm doing and I'm going to tell you now come because I listened to you," Macri said in a video. I listened to what you wanted to tell me on Sunday.
Opposition candidate, Alberto Fernandez, won a landslide victory over Macri in the primaries on Sunday, reducing his chances of winning a second term in the October general election.
The collapse of the Argentine currency, stocks and bonds on Monday was the worst since the debt crisis and the economic crisis that hit the South American country in 2001.
The Argentine peso plunged 30% Monday on a historic low of 65% against the dollar, before recovering partially.
Macri also announced that gasoline prices would be frozen for 90 days as part of its package of measures. The government said the new measures would cost $ 678 million.
"These are measures that will alleviate the suffering of 17 million workers and their families," he said, expressing his willingness to meet with the opposition.
The Argentine central bank sold an additional $ 148 million of its reserves Wednesday to stabilize the peso, bringing the total sales this week to $ 453 million.
An official of the Argentine government said the central bank's reserves amounted to $ 66 billion, of which $ 20 billion was free resources that could be used to pay the debt and stabilize the peso.
Debt payments for the remainder of the year are estimated at between $ 5 and $ 10 billion, depending on the ability of Argentina to reinvest in domestic treasury bonds, with the remainder to be used to intervene in the foreign exchange market.
According to government data, profits in 2020 are $ 27 billion.
Macri has reduced subsidies to utilities and other services to reduce chronic budget deficits, which have led to dramatic increases in electricity and gas prices since the beginning of his presidency in 2015. The subsidy cuts, which were part of a $ 57 billion loan agreement reached by the IMF last year, have undermined its popularity.
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