Argentina crisis deepens as central bank president resigns and strike paralyzes travel

Sep 26, 2018

Argentina central bank President Luis Caputo resigned less than four months into his post as the government struggles to contain economic turmoil and social unrest while it renegotiates a bailout with the International Monetary Fund.

Argentina President Mauricio Macri struggles to control inflation.

The resignation comes amid nationwide protests, including transportation strikes that are paralyzing travel in the country.

Caputo on Tuesday cited personal reasons for his departure amid reports of disputes with the IMF over Argentina’s exchange-rate policy.

He will be succeeded by Guido Sandleris, a top Finance Ministry official who has a Ph.D. from Columbia University, specializing in finance, macroeconomics and the international economy. Sandleris had previously taught at Torcuato di Tella University in Buenos Aires and was a visiting researcher at the Federal Reserve Bank of Minneapolis and the IMF.

Caputo’s unexpected resignation comes as President Mauricio Macri is facing a growing backlash at home amid a sharp economic contraction and double-digit inflation. On Tuesday, union workers held a strike opposing the government’s plans to cut public spending as analysts say the economy is heading for a recession after gross domestic product contracted 4.2% in the second quarter.

On Tuesday, unions staged a nationwide strike Tuesday to protest Macri’s economic policies. Walkouts grounded airline flights, paralyzed bus and train lines and forced the closure of the main agricultural port.

Many workers stayed home as the strike made commuting a puzzle, and some demonstrators blocked highways. Banks, courts and many schools and shops didn’t open. Many hospitals offered only emergency services, most Argentine flights were canceled and garbage wasn’t picked up.

The stoppage was led by labor unions protesting one of the world’s highest inflation rates and austerity measures ordered by President Mauricio Macri. They include the slashing of subsidies on utility rates, laying off state workers, and more recently putting new taxes on exports and eliminating several ministries.

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