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Weekly Report - 07 July 2022 (WR-22-27)

Argentine economy minister walks amid internal tensions

Argentina is trapped in a vicious circle where economic travails fuel political infighting within the ruling coalition which, in turn, creates more economic adversity. The resignation of the economy minister, Martín Guzmán, on 2 July came amid sustained fire from the Kirchnerista wing of the coalition. The uncertainty engendered by his departure is considerable. The government’s professed commitment to the targets laid out by the International Monetary Fund (IMF) retained some credibility while the architect of the March accord remained in office. The plunging peso and bonds that greeted the arrival of his successor, Silvina Batakis, suggests her reassuring words have not allayed investor concerns that her appointment points to the diminished authority of President Alberto Fernández and increased influence of Vice President Cristina Fernández, the bête noire of the markets.

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