Macri said he would “reverse” the result of Sunday’s primary, but acknowledged that a weaker peso triggered by the surge in support for Peronist opposition candidate Alberto Fernandez and his running mate former President Cristina Fernandez would fuel inflation.
The peso closed 15 percent weaker at 53.5 per US dollar after plunging some 30 percent to a record low earlier in the day after the primary election prompted market fears over Argentina’s potential return to the interventionist economics of the previous government.
Refinitiv data showed that Argentine stocks, bonds and the peso had not recorded this kind of simultaneous fall since the South American country’s 2001 economic crisis and debt default.
“I trust we will have a more even election in October that will allow us to go to a second round. Those who don’t want to go back to the past will join us,” Macri said at a news conference, adding that he was not considering a cabinet reshuffle.
Fernandez, a former cabinet chief, dominated the primary vote by a much wider-than-expected 15.5 percentage point margin over the president.
Fernandez has said that he would seek to “rework” Argentina’s $57-billion standby agreement with the International Monetary Fund if he won October’s general election. An IMF spokeswoman declined to comment on the Argentine primary result, citing a policy of not commenting on political developments.
Despite Macri’s struggles to turn the economy round, investors see the Fernandez ticket as a riskier prospect.
Argentine stocks were among the top losers on the Nasdaq index, and the local Merval stock index closed 31 percent weaker. Falls of between 18-20 cents in Argentina’s benchmark 10-year bonds and century bond left them trading at around 60 cents on the dollar or even lower.
Morgan Stanley downgraded its recommendation for Argentina’s sovereign credit and equities from “neutral” to “underweight” and said calculations suggest the peso could fall another 20 percent.