Argentina to Devalue Peso, Remove Currency Controls Thursday
- Finance Minister Prat-Gay announces end of currency controls
- Government expects $15b-$25b in four weeks to defend peso
Argentina's Macri Fulfils Free-Floating Peso Pledge
Argentina scrapped most of its currency controls and will allow the peso to start trading freely Thursday, orchestrating a devaluation that fulfills a key component of President Mauricio Macri’s campaign pledge to free up the sputtering economy and lure investment.
Finance Minister Alfonso Prat-Gay indicated he anticipates the peso could plunge by about 30 percent -- which is the gap between the official exchange rate and a parallel rate known as the blue-chip swap -- when markets open on Thursday in Buenos Aires. The central bank is ready to intervene should declines in the peso spiral out of control, Prat-Gay said at a press conference. In addition, the government expects between $15 billion and $25 billion in inflows over the next month to bolster reserves.