Argentina peso rose and the risk of the country's bankruptcy declined yesterday after the government unveiled its budget plan. The IMF commented that significant progress had been made on renewing the loan agreement.
The peso rose by 0.76% to close at 39.57 against the U.S. dollar after the government issued the budget proposal for 2019, which pledged to erase the initial fiscal deficit next year and is expected to reach 2.6% of GDP.
The currency has lost more than 6% of its value against the dollar this month and more than half of its value so far since the beginning of the year, as confidence in Argentina's ability to repay its debt in 2019 collapsed.
The draft budget aims to use increased taxes on exports as well as cut spending to achieve fiscal balance, and cuts have already provoked protests. The central bank said that based on preliminary estimates, the international reserves are at $ 49.6 billion, down from $ 63.9 billion in January.
According to the draft budget, it is expected that economy to shrink by 2.4% this year and by 0.5% in 2019.
Argentina has signed an agreement with the International Monetary Fund worth 50 billion dollars, which predicted a financial deficit beginning in 2019 1.3% of GDP.
