September 19, 2019
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Stabilizing peso is priority, Argentina's new finance minister says

Buenos Aires, Aug 20 (efe-epa).- New Finance Minister Hernan Lacunza said Tuesday that his main goal would be shoring up the Argentine peso, which has fallen sharply since last week's primary elections.

Lacunza said in his first press conference that President Mauricio Macri assigned him the priority task of "guaranteeing the stability of the exchange rate as a first-order objective."

Argentina "does not need a higher exchange rate," Lacunza said.

The exchange rate of the US dollar, which opened on Tuesday at 58 pesos, hit 63 pesos at one point last week following the governing party's disastrous showing in the Aug. 11 primary elections.

Lacunza, who was appointed finance minister after Nicolas Dujovne resigned on Saturday, said he had already been in touch with the International Monetary Fund (IMF), whose representatives plan to visit Argentina "in the next few days" to review the goals set in the three-year, $56.3 billion stand-by agreement signed last year.

The administration has not achieved the main goals set in the agreement: jump-starting the economy; reducing inflation; and creating jobs.

Argentina's GDP fell 2.5 percent in 2018, according to the latest official figures available, and the economy contracted by 3.1 percent on a year-on-year basis in the January-May 2019 period.

The recession has been accompanied by a 47 percent inflation rate in 2018 and an inflation rate of 25.1 percent during the first seven months of this year.

Economists warn that the inflation rate could hit the 50 percent level this year due to the recent market instability.

Dujovne, who had been finance minister since 2017, negotiated the controversial IMF stand-by agreement after the recession started in April 2018.

Under the terms of the agreement, the Macri administration had to impose sharp budget cuts.

Lacunza, who holds a degree in economics and previously served in Buenos Aires province's government, at the Central Bank and at Banco Ciudad, said Argentina posted a primary surplus in July and he expected a similar showing this month on the fiscal front.

The new finance minister said policy makers were most concerned about the fact that "one-third of Argentines have not been able to get out of poverty for several decades," adding that addressing this situation was a "debt owned to democracy" by Argentina.

Macri administered the oath of office to Lacunza at the Casa Rosada, the seat of the government, thanking him afterward for taking on such a tough job "at a very difficult time in Argentina."

The president said he expected his new finance minister to do "very well" in the post because he had a "deep commitment to service and courage" in taking on this challenge.

"I want to ask you to always have your focus on taking care of Argentines when you make each decision that you make over the next few months," Macri said.

In the Aug. 11 primaries, Peronist presidential candidate Alberto Fernandez finished 15 percentage points ahead of Macri.

Fernandez and vice presidential running mate Sen. Cristina Fernandez, who governed Argentina from 2007 to 2015, got 47 percent of the vote on the ticket of the Peronist Frente de Todos.

The 60-year-old Macri, who headed the ticket of the Juntos por el Cambio party, received just 32 percent of the vote, suffering a serious blow to his re-election chances.

Argentina will hold a general election on Oct. 27, with the next president being sworn in on Dec. 10 for a four-year term. EFE

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