Argentina is closing a year of “endless storms,” in the words of President Mauricio Macri. External and internal shocks to the economy halved the value of the peso against the U.S. dollar, sent inflation on an upward spiral and sank the country into a deep recession.
Here are some of the key events in Argentina’s very bad year.
Jan. 11: Official data for 2017 shows inflation in Argentina well above the central bank’s goal, fueled by hikes in prices for utility services, gasoline and public transportation.
Jan. 23: Argentina posts $8.5 billion trade deficit for 2017, compared with a surplus the year before. Total imports jump on the back of economic recovery and Macri’s trade liberalization, while exports sag due partly to a strong peso currency.
March 5: Argentine central bank sells $30 million in spot market, first significant intervention during Macri’s term to prop up the peso in face of growing investor doubts over his ability to deal with the country’s deficit and trade imbalances.
March 12: Hope is lost for any recovery in Argentine soy yields hit by a four-month drought that shows no signs of abating. Season is “dead” for the country’s top export.
March 13: Finance minister says Argentina will not sell any additional foreign bonds in 2018 and acknowledges investors are concerned about the country’s swift accumulation of debt after its return to capital markets.
March 21: U.S. Federal Reserve delivers first interest rate hike of the year, strengthening the dollar worldwide and triggering financial outflows from riskier emerging markets.
April 23: Yields on U.S. benchmark 10-year Treasury notes hit their highest in over four years on rising inflation expectations, reducing allure of emerging market assets.
April 25: After using more than $600 million in two days, the central bank sells another $1.47 billion in reserves on the foreign exchange market, its largest intervention in the last 15 years to defend the peso.
June 7: Argentina and the International Monetary Fund reach an agreement for a three-year, $50 billion standby lending arrangement, which Macri’s administration says is needed to provide a safety net and avoid a crisis.
Aug. 2: New figures show that in June Argentina’s industrial output experienced its sharpest annual drop since the country’s economic meltdown in 2002.
Aug. 13: Pressured by volatility in other emerging markets, especially in Turkey, the peso slides to an all-time low of 30 per US dollar.
Aug. 17: Macri acknowledges more Argentines are likely living in poverty now compared with last year, as the country’s economy slides toward recession following the currency crisis and severe drought that harmed farm output.
Aug. 30: Argentina’s central bank raises monetary policy rate to 60 percent from 45 percent as peso collapses, hitting record lows of 42 per dollar before ending day around 38.
Sept. 3: Macri announces new taxes on exports and steep cuts to spending in an “emergency” bid to balance next year’s budget as his center-right government seeks to persuade the IMF to speed up loan disbursement.
Sept. 25: Largest union calls 24-hour strike to protest Macri’s handling of the economy. On the same day, Argentina names a new central bank head, its third in 2018.
Sept. 26: IMF increases its three-year lending program with Argentina by $7 billion to $57 billion. The central bank pledges to halt full-scale interventions to support the ailing peso, and adopts a trading band.Reuters has more