This article is more than 2 years old

This article is more than 2 years old

Argentina has announced sweeping new austerity measures in an attempt to stem its unfolding currency crisis, prior to receiving $50bn (£38.8bn) of funding from the International Monetary Fund.

Speaking as the peso dropped to a fresh record low on Monday, President Mauricio Macri said the country was facing an economic emergency that would require austerity measures to resolve. Argentina will slash spending and raise export taxes in a push to accelerate reductions to its budget deficit.

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Although the measures speed up the pace of austerity, they ultimately fell short of expectations on the international markets, as the peso continued its fall with a slide of more than 4% against the dollar following the news. The peso has fallen by half against the dollar this year.

The new measures, announced by Macri’s right-of-centre government, include raising export taxes on grains and cutting the number of government ministries in a bid to balance its budget next year. The export taxes will be taken as an emergency step to be lifted once the economy has stabilised.

Using a televised public address in an attempt to restore international confidence in the battered domestic currency, Macri said: “This is not just another crisis. It has to be the last.”

Argentina and several other emerging market economies around the world such as Turkey and South Africa have come under intense pressure this year from plunging currency values. The US dollar has appreciated in value as the Federal Reserve lifts interest rates, which has made it more expensive for these countries to repay their dollar-denominated debts.

Macri said poverty levels would increase due to inflation running at more than 30% but the government would make an effort to support some welfare policies, such as help for children.

Nicolás Dujovne, the finance minister, said the steps announced on Monday would allow Argentina to achieve a balanced budget next year, instead of a 1.3% deficit as previously expected. The country plans to achieve a budget surplus of 1% of GDP by 2020, he said.

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Dujovne will hold talks on Tuesday in Washington with IMF officials to discuss accelerating payments from $50bn of emergency funding earmarked for the country in June.

Despite IMF backing and the Argentinian central bank raising interest rates to 60%, financial markets have become jittery about its ability to repay its mainly US dollar-denominated debts.