THE three-year, $ 50bn credit line agreed on with the IMF on June 7th was intended to halt Argentina’s currency crisis. The peso had lost a quarter of its value against the dollar since the start of the year as investors fled to safe havens. It kept sliding. On August 29th Mauricio Macri, Argentina’s president, asked the IMF to bulk up the package. On September 26th, after three weeks of negotiations, the fund’s managing director, Christine Lagarde, agreed to increase Argentina’s credit line from $ 50bn to $ 57.1bn and accelerate its disbursal.
Argentina is on the brink of its second recession since Mr Macri took office in 2015. The peso has now fallen by more than half in 2018, pushing inflation to 34% in August. The central bank has raised interest rates to 60%. Investors worry that a further slide in the peso would leave Argentina unable to service its large pile of foreign-currency debt. Mr Macri’s approval ratings have slumped.
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