Argentina replaces central bank governor amid currency crisis

Argentine Finance Minister Luis Caputo has been named the new governor of the central bank amid a run on the peso

Buenos Aires (AFP) – The Argentine central bank governor has been replaced as a run on the peso gained pace, with the currency dropping six percent against the dollar in one day.

Federico Sturzenegger tendered his resignation, and was replaced by finance minister Luis Caputo, a government statement said.

After a currency crisis in April and May, pressure continued Thursday against the peso, a week after the IMF announced a 50 billion dollar (43 billion euro) standby loan as Latin America’s third largest economy sought help to stabilize its economy and currency exchange market.

Since April, the peso has dropped 30 percent against the dollar, including 8.65 percent this week.

The finance minister’s brief will be taken over by Economy Minister Nicolas Dujovne.

The reshuffle was announced after a crisis meeting between President Mauricio Macri and Dujovne.

The Argentine economy climbed 2.8 percent in 2017, but growth slowed after a crisis of confidence that resulted in the loss of over $10 billion of central bank reserves.

That led Argentina to ask for IMF assistance to help it face mounting inflation, budget deficits and a weakening currency — an unpopular move in a country in which many associate the financial institution with painful memories of past economic and social crises.