The surprise resignation of Argentina’s central bank governor, Luis Caputo, and nationwide strikes – in protest against President Macri’s austerity plan – underscore the difficulty of fixing the country’s economic mess. Mr. Caputo reportedly clashed with the IMF over exchange rate policy, with the latter objecting to the former’s frequent FX interventions and pushing for a fully free-floating peso as part any new credit line. Mr. Caputo will be replaced by Guido Sandleris, a little-known academic. At the very least, the turmoil at the helm of the BCRA and tensions over FX policy will prolong ongoing negotiations with the IMF. Meanwhile, the nationwide strikes could gather momentum in the coming months as austerity ramps up. This doesn’t bode well for President Macri’s re-election prospects next year, raising the risk of a populist shift.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services