World Markets

Argentina 'will maintain slow rate of currency devaluation'- economy minister

Argentina's economy minister Martin Guzman on Friday vowed to maintain a slow rate of currency devaluation despite rising pressure on the peso and tumbling foreign reserves.

By Nicolás Misculin

BUENOS AIRES, Oct 23 (Reuters) - Argentina's economy minister Martin Guzman on Friday vowed to maintain a slow rate of currency devaluation despite rising pressure on the peso and tumbling foreign reserves.

Argentina had a "serious problem" with its fiscal deficit because of the coronavirus pandemic, but the real economy is showing "signs of recuperation" and the devaluation did not reflect the true condition of the country`s macroeconomy, Guzman said in an interview with Radio con Vos.

He acknowledged that currency devaluation expectations hurt the economy, but said exchange stabilization could not be achieved "from one day to the other."

Argentina’s central bank said earlier this month that it would allow a managed float of the peso currency and abandon its current “uniform daily devaluation” strategy as it seeks to adapt its monetary policy amid sharpening economic turmoil.

The gap between the official exchange rate and the rate quoted in the country’s informal currency markets reached 143% on Thursday due to the distrust of investors and strong black market demand for dollars.

(Reporting by Aislinn Laing Editing by Chizu Nomiyama)

((Aislinn.Laing@thomsonreuters.com; +56 223704250;))

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