Argentine peso crashes after election surprise, Economy News & Top Stories

Clay Curtis
August 13, 2019

Official results showed that in the primary elections that featured 10 presidential candidates, Macri and his vice presidential running mate, Miguel Angel Pichetto, of the ruling party received just 32.08 percent of the votes, with 98.67 percent of the ballots counted, while Alberto Fernandez and his vice presidential running mate, ex-president and current Senator Cristina Fernandez, of the opposition party Frente de Todos - Front of All - garnered 47.65 percent.

If Fernandez was to register the same result in October, he would be president as Argentina's electoral law requires a candidate to gain 45 per cent for outright victory, or 40 per cent and a lead of at least 10 points over the nearest challenger.

An exchange-traded fund tracking the Argentine stock market was set to head sharply lower Monday morning after that country's pro-business president lost a primary election Sunday, an outcome that suggests it will be hard for him to hold on to power after final-round elections in October. The country is in recession and still suffering with inflation and poverty. "Those who don't want to go back to the past will join us", Macri said at a news conference, adding that he was not considering a cabinet reshuffle.

The pro-business Macri has the support of financial markets and Washington, but has lost popularity amid a deep economic crisis that drove the inflation rate to almost 50% past year and slashed Argentines' purchasing power.

Fernandez said the market reactions were in response to Macri's failures on the economy. "The markets are giving warning that the government has put itself in a position it can not respond to", Fernandez told Radio 10.

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Voters were given a stark choice: stay the course of painful austerity measures under Macri or a return to interventionist economics.

Ever since taking office, Macri has blamed Argentina's economic woes on the policies enacted by three successive Kirchner governments - Cristina Kirchner's 2007-15 time in office was preceded by a single term for her late husband Nestor. She fought with the farm sector over export taxes and presided over a multi-year standoff with bondholders that kept Argentina locked out of the worldwide capital markets. Visit MarketWatch.com for more information on this news.

But the Buenos Aires stock exchange shot up eight percent on Friday amid expectation that Macri would do well in Sunday's vote.

"Recognizing that we have had a bad election, that forces us, starting tomorrow, to redouble our efforts so that in October we will get the support that is needed to continue the change", Macri said. "Additional promises can be made, but the gap he needs to make up is a very wide one", said Ilya Gofshteyn, senior emerging markets strategist at Standard Chartered Bank.

Bolsonaro has cast himself as foe to the left-wing leaders around Latin America and celebrated his friendship with Macri.

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