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Argentina’s Economy Minister Martín Guzmán resigned this Saturday amid a crisis that has triggered parallel exchange rates as well as inflation, after months of criticism from Vice President Cristina Kirchner and her associates.
In a long letter to President Alberto Fernández published on his Twitter account, Guzmán presented his resignation, in which he lists the challenges and achievements of his administration without formulating the reasons for his resignation.
The Tweet of Minister Martín Guzman presenting his resignation to President Alberto Fernandez
With the deep conviction and confidence in my vision of the path that Argentina should follow, I will continue working and acting for a fairer, freer and more sovereign Homeland. pic.twitter.com/rJQ5w0argQ
– Martin Guzman (@Martin_M_Guzman) July 2, 2022
Considered a brilliant student of the Nobel Prize for Economics Joseph Stiglitz, in his two and a half years of management Guzmán, 39, managed to renegotiate a debt of 66,000 million dollars with foreign bondholders and also that of 44,500 million with the International Monetary Fund. But these achievements -which prevented Argentina from falling into default- have not been enough to restore confidence to an economy that is registering one of the highest inflation rates in the world, 60% per year, and that despite strict exchange controls cannot stabilize its international reserves or the price of the dollar. For analysts, his resignation will have a very negative effect on the markets.
Resisted by the wing of the vice president within the Frente de Todos (center-left Peronism), Guzmán maintained that for his replacement “it will be essential” to work on a political agreement within the ruling coalition.
Guzmán’s management has been criticized by Kirchnerism since the end of last year, when in the mid-term legislative elections the Front for All lost its majority in the Senate. In particular, Kirchnerism questions the reduction of the fiscal deficit to meet the goals agreed by Argentina with the IMF.
The agreement with the Fund, submitted to parliament for approval in March, divided the ruling coalition, with a sector of lawmakers from the ruling party absent from the vote, including deputy Máximo Kirchner, the son of the vice president.
Just a week ago, the IMF approved the first review of the program of extended facilities for some 44,500 million dollars, corresponding to the first quarter of this year, and authorized a disbursement of 4,010 million for the South American country.
But in the following days there were strong movements in the markets, both in debt bonds and in the parallel exchange rate -in Argentina there is an official exchange rate and a parallel one or the “blue” dollar-, and the country risk index measured by the JP Morgan agency exceeded 2,500 points.
Gross international reserves stand at 42,471 million dollars, but net reserves are much lower according to analysts.
Until now, President Fernandez has not commented on his resignation nor has he yet said who will replace him.
with AFP
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