Argentina’s historically low exchange rate and diesel shortage force economy minister to resign
BUENOS AIRES: Economy Minister Martin Guzman tendered his resignation on Saturday, acting at the end of a week in which Argentina’s currency hit an all-time low against the dollar and truckers staged protests against diesel fuel shortages.
Guzman announced on Twitter that he had sent a multi-page letter of resignation to President Alberto Fernandez. “With deep conviction and confidence in my vision of the path that Argentina should follow, I will continue to work and act for a more just, free and sovereign homeland,” Guzman wrote.
With the Argentine peso slipping against the dollar, the government made it harder on Tuesday to acquire dollars to pay for imports. It acted like the 239 pesos bought in dollars on the informal market used by citizens and businesses to bypass official channels.
Argentina has suffered from a dollar shortage for years, which stems in part from Argentines’ mistrust of their own currency amid high inflation. Prices have risen nearly 30% this year, and analysts predict inflation could exceed 70% for all of 2022. Work stoppages by truckers have disrupted economic activity, including delivery to ports of cereals, which is one of the main ports of Argentina. imports.
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On Wednesday, the government said it was trying to increase the availability of diesel by allowing more biofuel to be blended in fuel and suspending the import tax on diesel. Argentina produces diesel but not in sufficient quantities for its needs and depends on imports, with world prices rising due to disruptions caused by the pandemic and the Russian invasion of Ukraine.
Analysts say one of the reasons for the shortage is that it is unprofitable for oil companies to import diesel because the government prevents them from charging what it costs to buy on the international market. .