Analysis: Hasty exit by Argentina's economy minister could deepen market crisis

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The abrupt departure of Argentina's economy minister and lack of a clear successor could threaten to further destabilize an economy already shaken by sky-high inflation, rising energy costs and growing fears over possible new defaults on debt.

Martin Guzman, the architect of the South American country's recent $44 billion deal with the International Monetary Fund , resigned on Saturday as tensions within the government boiled over as to how to handle the economic crisis in one of the world's top grain producers.

Inflation is running above 60% and is set to rise further, while high energy import costs have shackled the country's ability to increase depleted foreign currency reserves. Sovereign bonds have plunged toward 20 cents on the dollar. On Sunday morning there was no news on a successor and President Fernandez was yet to publicly address the departure, suggesting the government had been caught off guard by the exit.

Inside the Economy Ministry, where a large part of Guzman's team also resigned, the feeling was it had become hard to get things done effectively.

 

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