Argentina imposes austerity measures in bid to stabilise peso

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Argentina has announced austerity measures in a bid to tackle the “emergency” created by the country’s currency crisis.

In a televised address, President Mauricio Macri said Argentina could not keep spending more than it earned.

Taxes on exports of some grains and other products would rise and “about half” of the nation’s government ministries will be abolished.

He did not say when the taxes would be altered or give other details.

Argentina is the biggest exporter of soy meal and soy oil and is also a big producer of corn, wheat and raw soybeans.

The finance minister, Nicolas Dujovne, announced measures to cut the country’s budget deficit next year in a bid to stop the slide in the peso.

The currency has lost about half its value this year against the US dollar despite the central bank raising interest rates to 60%.

Mr Dujovne will travel to Washington DC on Tuesday to meet with the head of the International Monetary Fund (IMF), Christine Lagarde.

In June, Argentina was forced to secure a $50bn loan from the IMF – an organisation still widely loathed in the country, for its perceived role in the country’s 2001 economic crisis.

The government said the move was necessary to reassure international investors, after a decrease in farm exports, higher energy prices and a stronger dollar had prompted many to pull funds from the country.

A sudden weakening of the the peso followed.

Mr Dujovne’s goal is to finalise a deal that would quicken IMF payments to Argentina.

The IMF has asked the country to tackle its large fiscal deficit – a goal usually achieved by reducing government spending.

Argentina has been plagued by economic issues for years, and Mr Macri, who was elected three years ago, pledged to reverse years of protectionism under his predecessor, Cristina Fernandez de Kirchner.

Her government, which was in power from 2007 until 2015, nationalised companies and heavily subsidised many everyday goods and services, ranging from utilities to football transmissions on television.

Despite rampant inflation, the IMF said last month it expects Argentina’s economy to stabilise by the end of the year and a gradual recovery to begin in 2019.