Argentina's peso crashes as Cristina Kirchner looks set for return as vice-president

Argentina's peso crashes as Cristina Kirchner looks set for return as vice-president

The primary results showed Fernandez, a former cabinet chief, was well placed to win October's general election in the first round. Trading of the U.S. dollar opened in Buenos Aires markets at 59 Pesos to the dollar, but rapidly climbed to 65 Pesos and closed at 58 Pesos.

"We are living a fictitious economy and the government is not giving answers", Fernandez said in a radio interview on Monday morning.

The peso weakened 30.3% to a record low of 65 per USA dollar on Monday, traders said, after opposition candidate Alberto Fernandez - whose running mate is former president Cristina Fernandez de Kirchner - dominated the primary by a much wider-than-expected 15.5 percentage point margin. Meanwhile, Macri and his running mate, Miguel Angel Pichetto, received 32.1% of the vote.

The pro-business Macri has the support of financial markets and Washington, but has lost popularity amid a deep economic crisis that drove the inflation rate to almost 50% previous year and slashed Argentines' purchasing power.

Facing widespread discontent over austerity measures and low growth, Argentine President Mauricio Macri was snubbed by voters who appeared to hand a resounding primary victory to a ticket with his predecessor, Cristina Fernandez.

The Argentine government is trying to contain damage to the economy. One of the risks to his support was newly impoverished Argentines who were more energized to vote to punish him at the polls, political analysts said. A particular shock since last Friday, given the forecasts of the main pollsters anticipating a close run of Sunday, had seen shares and bonds rise strongly. He has proposed an economic and social pact to combat inflation, which is running at 55 per cent.

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In contrast, Alberto Fernandez - who was expected to come out on top in the symbolic primaries but by a much smaller margin - said the country could look forward to creating a "new history".

Since all major parties have already selected their presidential candidates and political parties hold their primaries simultaneously, the vote served as a pre-election opinion poll to gauge how candidates will fare in the presidential election of October 27 and the potential November 24 run-off.

In such a scenario, Fernandez would be able to undo economic reforms put into place by Macri's administration, and the International Monetary Fund's bailout package. "In a nutshell, the market thinks Fernandez is the return of populism", said Claudio Irigoyen of Bank of America Merrill Lynch (BAML).

Macri has convened a government meeting after losing Sunday primaries and ordered the ministers to analyze the necessary changes in governance and develop a strategy to prevent a sharp fall in the rate of the national currency.

He blamed Macri for the market turmoil. He is also advocating subsidies to support the people.

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