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Europe, Forex

Argentina’s new economy chief says peso’s stability is top priority

(Recasts with Lacunza quotes, comments from central bank chief)

By Hugh Bronstein and Jorge Otaola

BUENOS AIRES, Aug 20 (Reuters) – Argentina will stand by the 2019 fiscal targets it has agreed with the International Monetary Fund and work to stabilize its currency, which lost 18% of its value last week, new Treasury Minister Hernan Lacunza said on Tuesday.

Minutes after being sworn in by President Mauricio Macri, Lacunza told reporters the government will stick with the goal of erasing its primary fiscal deficit this year, despite a series of spending measures announced last week aimed at spurring growth in the recession- and inflation-racked economy.

He said his top priority will be to stabilize the peso, which tumbled after Macri, who has run a business-friendly government, was drubbed in an Aug. 11 primary election by Alberto Fernandez. The center-left Peronist candidate is now expected to defeat Macri in an Oct. 27 general election.

The peso opened 1% weaker on Tuesday at 55.55 per U.S. dollar

“This is a complicated time for Argentina,” said Lacunza, formerly the chief of economy for Buenos Aires province.

“We want to leave a solid economic platform for whichever candidate wins” the presidential election, he said, adding that Argentina had a primary fiscal surplus in July and that he expected a surplus in August as well.

Macri, struggling to revive his campaign for a second term, is betting that the new treasury chief can help stabilize the economy.

Nicolas Dujovne, the former treasury minister, quit on Saturday, saying he believed the country needed “significant renewal” of its economic team.

Central bank chief Guido Sandleris also told reporters on Tuesday that the bank would continue to sell reserves in an effort to halt the peso’s slide.

The recent currency weakness interrupted what had been a fall in the country’s inflation rate, Sandleris said. Consumer prices in Argentina rose 55% in the 12 months through July, according to official data, but monthly rates had been falling. (Reporting by Hugh Bronstein Editing by Chizu Nomiyama and Paul Simao)


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