Don’t Cry for Argentina! They have been a mess for decades and have defaulted on their sovereign debt 8 TIMES. Now their currency, the Peso, is plummeting and their central bank just did the unthinkable.
(Bloomberg) — Argentina’s central bank on Thursday raised its benchmark interest by 15 percentage points to 60 percent, the highest in the world, after the peso plummeted to a new record low.
The move comes one day after President Mauricio Macri announced he had requested the International Monetary Fund to speed up disbursements from a $50 billion credit line, in order to demonstrate the country had enough cash on hand to fund the 2019 budget without going further into debt.
Earlier on Thursday the peso fell to a fresh record low of 40.00 per U.S. dollar. It pared some of its declines following the central bank announcement. The peso is down 49 percent this year.
The staggering rate hike to 60% failed to halt the Peso decline.
But since 2000, the current Peso crisis is barley noticeable.
And the inflation rate in Argentina is … 31%.
The Argentina yield curve is bad enough denominated in US Dollars, but denominated in Argentinian Pesos it is downright scary!
Say, maybe Argentina can begin producing cars again like they did under Juan Peron: the IAME Justicialista!