Opposition candidate Alberto Fernandez said he was willing to collaborate with Argentina’s current government after his landslide victory in Sunday’s primary election sent the peso currency, stocks and bonds reeling, but he placed responsibility for the market meltdown on President Mauricio Macri.
Fernandez, who has former president Cristina Fernandez as his running mate, pulled off a stunning upset in the primary with a wider-than-expected 15-point lead over incumbent President Mauricio Macri. The results sent a shockwave through markets on Monday amid fears of a return to the past interventionist policies of Cristina Fernandez’s government, with the peso plunging 30% to a record low before recovering slightly.
Refinitiv data showed 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. “The dialogue is open, but I don’t want to lie to Argentines. What can I do? I’m just a candidate, my pen doesn’t sign decrees,” Fernandez said in an interview with Argentine TV channel Net TV broadcast late on Monday.
Earlier in the day, Fernandez said “markets react badly when they realise they were scammed,” referring to the policies of Macri, whose promised recovery has not materialised.
The cost of insuring against an Argentine sovereign default jumped again yesterday, according to data from IHS Markit. Markit’s calculations price the probability of a sovereign default within the next five years at more than 72%.
Monday’s crash in the peso unnerved emerging market investors, with markets already jittery over the Sino-US trade war. In the NET TV interview, Fernandez also took aim at Brazilian President Jair Bolsonaro on the same day the right-wing leader warned that his country could see a wave of migrants fleeing Argentina if the presidential election there returns to the leftist policies of the Fernandez ticket.
“In political terms, I have nothing to do with Bolsonaro. I greatly welcome him speaking ill of me,” Fernandez said, while acknowledging that Brazil would always be Argentina’s “main partner.”
Fernandez also said US President Donald Trump was a good leader for his country, but not for the world. Fernandez, regarded as a moderate within the Peronist movement, has proposed an economic and social pact to combat inflation, which is running at 55%.
Mauricio Macri
