Argentina is in the midst of fears of an economic crisis as its currency has faced a drastic devaluation against the dollar in the past month. During the first four months of 2018, the currency fluctuated between 18.59 on December 31 to 20.52 in May 1, but in the past two weeks it increased to 25.00 ARS on May 14. The loss of value of close to 20 percent in the past two weeks has resulted in active intervention by Argentina’s central bank selling off over $6 billion in reserves to manage the currency.
According to reports, Argentina is negotiating a loan with the International Monetary Fund (IMF) to avoid any possibility of an economic crisis. Press reports note that the unverified loan amount of $20-30 billion may still take several weeks to become concrete.
Jaime Campos, the President of the Asociación Empresaria Argentina (AEA or Argentine Business Association) which includes steel-related companies, said in a press release that the association supports the actions of Argentine President Mauricio Macri to seek the line of credit from the IMF and that it is important for domestic prices not to succumb to an inflationary reaction. Exports, which are usually denominated in dollars, may see some opportunities for placement in the midst of the short-term situation.