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Weekly Report - 21 March 2019 (WR-19-11)

ARGENTINA: Trying to avert another currency crisis

Argentina’s central bank (BCRA) hoisted the benchmark interest rate back up to record levels last week after inflation reached a 12-month high in February. Time is starting to run out for President Mauricio Macri. If he is going to secure re-election in October, his government will need to get a firm grip on inflation and improve the country’s economic fundamentals. Days after the adverse inflation result, the International Monetary Fund (IMF) cleared US$10.87bn of credit for use by the Macri administration but not without calling for “further restraint in government spending”. This will constrain Macri’s room for manoeuvre as elections approach.

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