Argentina is heading towards its seventh currency devaluation in 20 years, analysts say, as pressure builds on the peso and investors lose faith in the government’s ability to stabilise the economy. The country struck a deal to restructure $65bn of foreign debt in August, shunting debt repayments far into the future. But financial markets remain fragile. Bond prices have dropped back down to distressed levels, equity prices have collapsed and the gap between the official and black market exchange rates is widening.
Analysts and investors think that with just $1bn in liquid reserves to hand, Argentina’s central bank will be forced to tighten restrictions on imports and reset the peso at a new, much weaker value.
Source: Financial Times