According to the Financial Times, Batakis “will not calm the markets”

“It won’t calm the markets.” The sentence from the Financial Times speaks of the recent arrival of Silvina Batakis, the new Minister of Economy. The sentence sums up what the market has shown two days after the start of this pressing week for the Argentine economy. For the British newspaper, the problem lies in the bond that the official maintains with Cristina Kirchner’s allies.

For the FT, there’s more, and that’s it that “almost unknown provincial minister” defend the price control, market intervention and tax increases with unexpected rent.

“Argentina elects a former provincial official as Minister of Economy. Silvina Batakis replaces Martin Guzman, who negotiated a $ 44 billion restructuring agreement with the IMF, “begins the article written by Lucinda Elliott, of Buenos Aires, and Michael Stott, of São Paulo, Brazil.

“The deep divisions within the left-wing coalition that governs Argentina have pitted the powerful vice president and former president of the country, Cristina Fernández de Kirchner, against the president, just when the problems of the Argentine economy worsen “indicated the publication.

Regarding the new appointee, the FTI indicated: “Financial analysts pointed out that the appointment of Batakis, former Minister of Economy of the province of Buenos Aires and who recently worked at the Ministry of the Interior, will not help calm the negative sentiment in the markets, given its links with the more radical wing of the Peronist government allied with Fernández de Kirchner “

In this sense, he stressed that “the reaction of the markets on Monday was moderate after the July 4th holiday in the United States, where Argentine bonds are traded more frequently”.

“The official currency of Argentina, which is kept artificially high in an attempt to control inflation, weakened by 0.5% to $ 126 per dollar. The parallel exchange rate increased by nearly 15% in early trading. at $ 280 pesos per dollar.

For financial analysts consulted by the Financial Times, “the market was already fragile and now it will be terrified”. This was underlined by Riccardo Grassi, head of risk management at the Swiss hedge fund Mangart Capital Advisors, involved in the restructuring of Martin Guzman’s debt in 2020.

For its part, for the economist Fernando Marull, the markets “will take it badly”. “It is not very well known.… and our worst case scenario for the economy now looks more likely. “

William Jackson, chief emerging market economist at Capital Economics, noted that Fernández de Kirchner’s growing influence could further alienate Argentina. “on the path of macroeconomic stability”, and that “a sovereign default becomes more and more probable”.

“Fernández de Kirchner and his allies have repeatedly criticized the deal with the IMF, in which Guzmán mediated, calling instead for more spending and greater government intervention to fight inflation and poverty,” notes the publication.

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