REUTERS | Agustin Marcarian
Argentine unions, small firms and activists march near Argentina’s Congress to demand changes in President Mauricio Macri’s economic policies, in Buenos Aires, Argentina April 4, 2019.
Renewed market volatility in Argentina could spark another currency crisis, analysts have told CNBC, as the recession-hit country prepares for presidential elections toward the end of the year.
The popularity of President Mauricio Macri has taken a substantial hit in recent months, with rampant inflation, austerity measures and rising poverty rates all threatening to derail the pro-market candidate’s re-election campaign.
The Argentine peso settled at $43.68 on Monday, recovering slightly after falling to a closing record low of $43.97 on Friday. It is — by some distance — the world’s worst-performing currency so far this year.
“In Argentina, they are super-sensitive to any shift in the peso — more than any other country I can think of. They look at the peso as a guide for the economy and so, politically, it is really important,” Fiona Mackie, regional director for Latin America at the Economist Intelligence Unit (EIU), told CNBC via telephone.
“We shouldn’t see a dramatic overshooting of the peso like we saw in August last year but, having said that, there is a risk of renewed volatility at any moment,” Mackie said.