Thumbs down

THOSE baffled by the Argentine economy could do worse than listen to Puff Daddy. Ask what ails the country and the answer will echo the rapper’s ode to the 100-dollar bill, “It’s all about the Benjamins”. Had the Argentine government resolved its row with “holdout” investors, rather than defaulting in July, it might now be able to tap international markets for hard currency. Instead it is struggling to manage its meagre reserves, which hover at around $28 billion. The economy is stagnant, the peso is falling in unofficial markets, and inflation is rising.

The chances of a happy outcome to this situation worsened on October 1st, when Juan Carlos Fábrega, the governor of the central bank, resigned after less than a year on the job. Mr Fábrega had long butted heads with Axel Kicillof, the country’s economy minister. Battling an inflation rate that is expected to reach 40% this year and seeking to conserve the country’s reserves, Mr Fábrega had supported moves earlier this year to raise interest rates and devalue the peso. Mr Kicillof complained these decisions froze economic activity.