Argentina stock exchange plunges 6%

GMT 08:10 2015 Saturday ,19 December

Arab Today, arab today Argentina stock exchange plunges 6%

Argentine stock market
Buenos Aires - AFP

Argentine stock prices plunged by more than six percent shortly before the close on Friday after a week of shock economic reforms by the new conservative government.

The sharp fall in Buenos Aires' key Merval stock index came an hour before the close of weekly trading and a day after the peso currency plunged by 30 percent due to the scrapping of dollar exchange restrictions.

The index was down 6.28 percent to 11,223.16 points, with all the stocks on the board showing losses.

Financial media cited investor uncertainty about the impact of reforms by business-friendly President Mauricio Macri in his first week in office.

On Thursday, the peso weakened sharply against the dollar as it floated freely on the market for the first time since 2011.

The dollar changed hands for about 14 pesos on Thursday and the rate eased slightly on Friday to 13.60 dollars.

That was still high above the official fixed rate of 9.84 dollars to the peso on Wednesday before the fixed rate was scrapped.

Macri says the sharp peso adjustment is needed to boost the economy, though economists as well as his political opponents warn it will hurt Argentines' purchasing power in the medium-term.

The currency reform was the most dramatic of his measures since taking office on December 10.

He axed a controversial tax on agricultural exports including grain and meat and lowered the tax on soybeans, a major export.


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