BUENOS AIRES (Reuters) —The Argentine peso currency crashed following news that populist left-wing Peronist opposition leader Alberto Fernández was leading in the primary election.
Market fears over Argentina’s potential return to the interventionist economics of the previous leftist government prompted stocks and bonds to tumble, and Argentines rushing to buy U.S. dollars. In response, President Mauricio Macri vowed on Aug. 12 that he would win a second term.
Alberto Fernández is running with former President Cristina Fernandez de Kirchner, who was indicted on corruption charges last year and is currently standing trial.
Under the Kirchner governments of Cristina and her late husband before her, the IMF reported that public spending went from 23 percent of GDP to 41.3 percent. The collapse of Argentina’s economy in 2012 saw Macri win the 2015 elections as one of the few non-Peronist leaders in the country’s history. But he was left with the challenge of reviving a bankrupt country.
Macri said he would “reverse” the result of Sunday’s primary, but acknowledged that the weakened peso would fuel inflation.
The peso closed 15% weaker at 53.5 per U.S. dollar after plunging some 30% to a record low earlier in the day.
Refinitiv data showed Argentine stocks, bonds and the peso had not recorded this kind of simultaneous fall since the South American country’s 2001 economic crisis and debt default.