Argentina has announced a series of new austerity measures to grapple with the collapse of its currency. Those measures include getting rid of half of its government ministries and hiking taxes on exports. The ministries that would be closed or combined have not been specified.
The Argentine peso has lost more than 50 percent of its value against the US dollar this year. The devaluation of the peso makes it harder for the government to pay back its creditors. Credit ratings agency Moody’s shows that nearly 70 percent of Argentine government debt is in foreign currencies.
President Mauricio Macri announced the measures the day before his government is due to meet officials from the International Monetary Fund. Nicolas Dujovne, Argentina’s finance minister, will be meeting with IMF chief Christine Lagarde about the possible acceleration of a rescue package to the country worth a maximum of $50 billion. The government has already received $15 billion and is due to get an additional $3 billion next month.
The austerity measures include an increased export tax on grains, one of the country’s biggest crops. Argentina is one of the biggest producers of corn, wheat and raw soybeans in the world, and is the single biggest exporter of soy meal and soy oil. Macri told Argentine exporters who will have to pay the additional tax, “I have to ask you to understand that this is an emergency and we need your support.”
These are just the latest attempts in an ongoing effort to stave off a collapse of the currency. Argentina’s central bank increased interest rates from 45 percent to 60 percent last week in an attempt to stabilize the peso. Despite the efforts, Argentina’s currency woes have deepened in recent weeks and the pain shows no signs of abating.