ARGT - Argentina central bank devalues peso hikes rates after shock primary election result

2023-08-15 08:02:39 ET

Argentina's central bank devalued its currency by close to 18% and raised its benchmark lending rate by 21 percentage points to 118%, in the wake of a shock primary election win by far-right candidate Javier Milei.

The Central Bank of the Argentine Republic said the peso ( USD:ARS ) would be held at 350 to the U.S. dollar till the October presidential elections.

Markets, which were betting on more moderate candidates, slid after the surprise victory was announced. The Global X MSCI Argentina ETF ( ARGT ), which tracks the largest securities with exposure to the country, ended 2.6% lower on Monday.

Argentina has been struggling to tackle an economic meltdown brought about by sky-high inflation of over 100%, a rapidly depreciating peso and rising poverty.

Libertarian presidential candidate Milei has vowed to implement aggressive policies to bring Argentina out of its economic spiral, even proposing to replace the peso with the dollar and eliminate the central bank eventually.

In other news, Russia's central bank sharply hiked its key interest rate in an emergency meet to stem the ruble crash .

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