The Argentine central bank hiked its interest rate to 40 percent on Friday, meant to buoy the failing peso, which fell 7.83 percent against the U.S. dollar the day before. This is the third time that the bank has raised its regular interest rate since April 27 when it was set at 27.25 percent.
The move was mainly made in an effort by the Mauricio Macri administration to salvage the peso and to cut the country's year-long 25 percent inflation rate to 15 in order to gain international investor confidence. Meanwhile, average Argentines are cash-strapped and suffering.
President Macri along with his pro-austerity congress have been raising interest rates, slashing subsidies and enacting massive public sector layoffs over the past year, prompting continual and massive protests in response. In a country known for its strong union membership, the government chopped transportation subsidies on May Day increasing the Buenos Aires metro cost by nearly 50 percent.
Following IMF recommendations to cut federal spending, Macri once again slashed energy subsidies in April. Since the president took office in 2015 the price of natural gas has gone up by 1,070 percent, and electricity, between 1,020 and 2,700 percent.
In December Congress agreed to decrease the government’s contribution to the public medical and pension plans by 20 percent. At least 100 demonstrators, among them a journalist, were injured by state security forces during public protests against the measures.
"This crisis looks set to continue," Edward Glossop from the Capital Economics told Reuters.
"The real surprise is how quickly and suddenly things seem to be escalating," he added.
Argentine journalist, Luis Bruschtein says these economic moves “concentrate and deepen inequality. In addition, these policies seek to grow the economy on a base of injustice and exploitation," he wrote in a Pagina 12 opinion over the weekend.
On her Twitter account yesterday, former president Cristina Fernandez (2007-2015) referring to the Macri administration wrote, "tariffs, interest rates, dollar, devaluation, inflation, adjustments, break-ins of critical journalists, and advice by functionaries to remain calm who maintain their millions of dollars offshore are now everyday occurrences."