Argentina’s election result could impact emerging markets: Expert | Capital Connection
We’ve seen some mild moves for other currencies, says Saktiandi Supaat, head of global FX strategy at Maybank.
Argentina elections crash stock market and currency
Argentine peso and stock market crash amid preliminary presidential election results.
As the primaries showed, the incumbent head of state Mauricio Macri lost with by a much wider margin than expected. This caused serious doubts about the possibility of his re-election in October.
Main Argentine stock index MERVAL fell more than 40%, marking the second largest one-day decline since 1950, Reuters reports..
The peso collapsed by 30%.
Preliminary voting result considered by many experts as a clear signal that the South American country is ready to reject the ruling government’s tough economic policies. This influenced the warnings of analysts about a possible global panic in the financial markets..
Speaking in Buenos Aires Monday morning, Jimena Blanco, head of Americas research at risk consultancy Verisk Maplecroft, told CNBC that even the most optimistic supporters of opposition candidate Albert Fernandez did not expect such a result..
Argentina’s central bank raised percentage rate immediately by 10%. Thus, the regulator is trying to cope with the consequences of the outbreak of the crisis.
Analyst at the Economist Intelligence Unit Abhijit Surya warned investors about the possible depreciation of the national currency.