In its dying days, Mauricio Macri’s government emulates its opponents

ARGENTINA WAS not invited to the Bretton Woods conference in 1944 that created the IMF, and it did not join until 1956. But it has been making its presence felt ever since. At the end of August a team from the IMF visited Buenos Aires to assess the lie of the land before deciding whether to give Argentina’s government, led by Mauricio Macri, any more of the record $57bn loan (worth over 10% of Argentina’s 2018 GDP) agreed last year. But as the team left town, the landscape shifted.

Mr Macri’s government said it would delay $7bn-worth of repayments on short-term bills held by institutional investors and seek a rescheduling of over $50bn of longer-term debt. It would also request new, extended loans from the IMF to help Argentina repay the money it already owes them. As the markets digested the news, the ground moved again. On September 1st the government imposed currency controls, preventing Argentines from buying more than $10,000 a month, forcing exporters to convert their earnings into pesos, and placing new restrictions on companies’ ability to buy foreign exchange.

“This is not a port we imagined we would reach,” said Hernán Lacunza, Mr Macri’s new finance minister. The president had, after all, cast off in precisely the opposite direction after coming to power in December 2015, seeking to remove many of the...

via The Economist: Finance and economics Business Feeds

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