Since Argentine ex-President Cristina Fernandez de Kirchner announced June 24 that she would be attempting a political comeback by running for a senate seat in elections Oct. 22, the country’s currency has weakened more than any other in emerging markets and its borrowing costs have begun to rise again. That reflects the jitters investors have about a return to Fernandez’s protectionist policies, which President Mauricio Macri is slowly unwinding after scoring a surprise victory over her alliance’s candidate in 2015. So-far cautious investors have been looking to the mid-term elections to gauge public appetite for Macri’s center-right policies. Voters go the polls first on Aug. 13 in a widely anticipated primary election.
The technical tie for the Senate seat in the province of Buenos Aires is being closely followed by the business community and potential investors in Argentina, fearing that a victory by former president Cristina Fernandez over the candidate sponsored by president Mauricio Macri, could be interpreted as a longing for the hand-out and subsidies policies of Kirchnerism and rejection of the current economic reforms which have yet to deliver enough jobs and stable prices.
Much will depend on the urban belt that surrounds the capital Buenos Aires by opposition to the extended urban rust-belt, still waiting to recover many of the lost jobs. In the rest of the rich farm land of the province Macri and his policy eliminating Kirchnerite levies on produce and promoting exports making him unbeatable.