Features

Argentina is reverting to type

The Argentine peso has been the worst-performing currency against the dollar this year, and more misery could be in store.

The Argentine peso has been the worst-performing currency against the dollar this year, and more misery could be in store. Investors have been dumping the country's "century bond", whose launch in 2017 had seemingly heralded a new start under business-friendly president Mauricio Macri: the 100-year paper has fallen to 66 cents on the dollar, says Colby Smith for the Financial Times, implying a considerable risk of default.

A poll putting leftist firebrand and former leader Cristina Fernndez de Kirchner ahead of Macri has alerted markets to the risk that the president may lose his bid for re-election in October.

With inflation still running at 55% in March and the economy shrinking, voters appear willing to give another chance to Kirchner, who is facing trial on corruption allegations, says The Wall Street Journal. During her time in power she nationalised businesses, printed money to finance the deficit, and imposed price controls.

Macri has responded to the crisis by imposing price controls of his own, says The Economist. "Such measures will never solve the real problem: never have, never will," as Miguel Acevedo, the head of the country's leading employers' association, points out. The fact that Macri has reverted to his predecessor's economic playbook and taken this backward step suggests that in Argentina "a populist is a liberal mugged by inflation".

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
The Arab Spring ten years on: a revolution that failed to blossom
Global Economy

The Arab Spring ten years on: a revolution that failed to blossom

Ten years ago, the Arab world was rocked by mass protests and popular uprisings that ousted long-reviled dictators. For the most part, the end result …
23 Jan 2021
The charts that matter: inflation, bubbles, and booze
Economy

The charts that matter: inflation, bubbles, and booze

As US stocks head higher into bubble territory, John Stepek looks at the charts that matter most to the global economy.
23 Jan 2021

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021