Argentine President Mauricio Macri vowed Monday to win re-election despite the unexpected strength of the opposition in the early elections. This result has shocked the market, depressed the peso exchange rate and caused the stock market bond market to fall sharply.
Markley said he would "reverse" Sunday's primary results, but acknowledged that inflation would be exacerbated by the devaluation of the peso caused by the surge in support for opposition candidate Alberto Fernandez and his running mate, former President Cristina Fernandez.
The Peso fell 15% to 53.5 pesos against the dollar, falling by about 30% to a record low in the day, amid fears that Argentina might resume its previous government's intervention in the economy.
Refinitiv data show that Argentina's stock and bond markets have suffered such a synchronous decline, which has not been seen since the country's economic crisis and debt default in 2001.
Fernandez overwhelmed the incumbent president in the primary by a much higher 15.5 percentage point margin than expected.
Fernandez said that if he wins the October election, he will seek to "revise" Argentina's $57 billion standby financing agreement with the International Monetary Fund (IMF). A spokesman for the IMF declined to comment on Argentina's primary results, saying policy provisions could not comment on political developments.
Although Markley's efforts to reverse the economy face difficulties, investors believe that the greater risk comes from Fernandez.
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