BUENOS AIRES, Argentina (AP) – Argentina’s currency sharply devalued against the U.S. dollar on Thursday as the new administration lifted deeply unpopular limits on the buying of foreign currencies, a major change that will expose Latin America’s third largest economy to international market forces in ways not seen in over a decade.
The devaluation, widely expected by economists and even frequently hinted at by new President Mauricio Marci, could exacerbate already soaring prices and spook Argentines, who fear big changes to an economy that has suffered through periodic financial meltdowns.
Minutes after exchange houses and banks opened Thursday, the peso initially traded at around 15 to one U.S. dollar before dropping to 14.30.
That represents a nearly 60 percent drop in value compared to the rate of nine pesos to the dollar fixed by the government over the last year.
The change was put in motion Wednesday night, when Finance Minister Alfonso Prat-Gay announced there would no longer be restrictions on buying foreign currencies. Macri had campaigned on promises to lift the restrictions, saying they hurt businesses at home and scared away would-be international investors.