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Michael Roberts Blog

Argentina is seeking International Monetary Fund aid after a series of drastic interest rate rises failed to stop the slide in the peso, pushing the country towards a financial crisis. Mauricio Macri, Argentina’s right-wing, pro-big business president, announced the approach to the IMF in a nationally televised address, saying international assistance would enable the government to “avoid a crisis like the ones we have faced before in our history”.  Asking the IMF for funds will mean more fiscal austerity and a hit to living standards.  One foreign investor said “The most effective way would be to restrict wage hikes.”

In recent weeks, the right-wing government in Argentina has been forced to hike its policy interest rate (which sets the floor for all borrowing rates) dramatically from an already high 27% in April up to 40% last week.  In January, the Argentine central bank had been experimenting with reducing its interest…

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