Argentine President set to choose new economic chief after Guzman quits

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Argentine President set to choose new economic chief after Guzman quits

Argentine President Alberto Fernandez is about to choose his new economic boss almost 24 hours after Martin Guzman resigned on Saturday, a shock departure that deepens the country s financial crisis, with inflation soaring and the nation s bonds in distressed territory.

Fernandez met Sunday at his residence in Olivos, outside of the capital, with Lower House Speaker Sergio Massa, who is expected to have a major influence on the decision. Fernandez spokeswoman said conversations are ongoing but didn't respond to questions about when there would be an announcement.

The often predictable, moderate Guzman stunned the nation Saturday afternoon, publishing a seven-sided resignation letter on Twitter while Vice President Cristina Fernandez de Kirchner was at a rally event. The timing was seen as a bulging divide within the ruling coalition over the direction of the economy.

His exit prompted doubts that the government can meet the targets of its $44 billion program with the International Monetary Fund. The program, announced in March, had to be revised in June.

Alberto Ramos, head of Latin America research at Goldman Sachs Group Inc., said a politically weaker and unpopular presidency would increase the risk that macro policy could turn more heterodox and interventionist. READ MORE: Argentines Seek Hedging in Cryptocurrencies after Economy Minister Resigns.

Argentine leaders like Fernandez rush to replace economy ministers in a bid to stem the financial chaos. The price of the digital currency, the only ones open over the weekend, was as high as 279 per dollar Saturday night, an 11% jump.

The official exchange rate of 125 per dollar is cloaked in currency controls by the central bank. The growing gap between the official and parallel rates and the uncertainty over economic policy could eventually force the government to devalue the official rate, something Fernandez promised he wouldn't do.

Argentina is facing a particularly fragile moment, as a crisis-prone country. Inflation over 60% is at its highest level in 30 years, while nearly 40% of Argentines live in poverty. The central bank has razor thin cash reserves to protect the peso from a currency rout.

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