Argentina's peso falls to record low after request for advance on IMF loan

Aug. 30 (UPI) -- Argentina's peso fell to a record low after President Mauricio Macri asked for an acceleration of a $50 billion International Monetary Fund bailout package.

In a televised address on Wednesday, Macri said he sought "all the resources that should be necessary" to assure stability in the country's 2019 budget. In essence he asked for an advance on the next tranche of the IMF loan after $15 billion was received and disbursed in June. Macri said the new financing arrangement would bolster public confidence and return Argentina to growth.

"Over the last week there have been new expressions of a lack of confidence in the market about our financing capacity for 2019," Mr Macri said in his speech.

It instead frightened investors. The peso fell 7.9 percent in one day against the U.S. dollar, to about 34 pesos per dollar. It has fallen nearly 50 percent in 2018 as investors pull money from developing countries with high funding needs; Turkey and Argentina are examples. The government raised interest rates 45 percent in that time in an unsuccessful attempt to slow the peso's decline, and obtained the three-year IMF loan.

"I have instructed IMF staff to work with the Argentine authorities to strengthen the Fund-supported arrangement and to re-examine the phasing of the financial program," Christine Lagarde, IMF managing director, said Wednesday in a statement.

Despite the cooperation of the IMF in restructuring the loan, the peso is now worth about three U.S. cents, down from about 5.5 to the dollar earlier this year. Argentina is sliding into a recession, Moody Investors Service said, and Macri's deckling popularity could impact his re-election plans in 2019.