Argentina's benchmark interest rate hiked

Argentina's Central Bank announced Thursday it has raised its benchmark interest rate from 45 to 60 percent in a bid to arrest a slide in the value of its currency.

Earlier Marcos Pena, President Mauricio Macri's cabinet chief, was forced to deny the government was facing an economic disaster.

"We are not facing economic failure," said Pena.

"This is a transformation, not failure. In that transformation there are difficult moments," he said.

The peso opened nearly 4.0 percent lower against the dollar on Thursday, having plummeted almost 7.0 percent the day before, despite explicit support from the International Monetary Fund for the government's policies.

The IMF's backing, however, failed to bolster the currency, which has lost more than 45 percent of its value against the dollar since the beginning of the year.

IMF chief Christine Lagarde said Wednesday she had agreed to Macri's request to speed up payments of a $50 billion loan in a bid to shore up Argentina's battered economy.

Speaking at the opening of the Council of the Americas business chamber in the capital, Pena attributed the market volatility to Argentina's recent history.

"We are the country that has the most times violated its international contracts in the world, which has lied and cheated the rest of the time, and has shown again and again -- until now -- that it is not willing to seek fiscal balance and depend on its own resources," he said.

He insisted the path taken by Macri since he took office in December 2015 is one "of fiscal balance, development and growth."

The current exchange turbulence was attributable to "structural vulnerabilities" following a massive drought that affected agricultural production, the main generator of foreign currency, and a "change in the financial and commercial context in the world, notably due to tensions between the United States and China," Pena said.

"There are no magic solutions, you have to go for the truth."

Macri had sought to soothe the turbulence in a statement before markets opened on Wednesday, assuring Argentines that help is on the way.

"Over the past week, we have had new expressions of lack of confidence in the markets, especially over our ability to obtain financing for 2019," Macri acknowledged.

He said the IMF would provide "all the funds necessary to guarantee the fulfillment of the financial program next year."

In return for IMF support, the government has committed to reducing its budget deficit to 2.7 percent this year, from 3.9 percent in 2017, and to 1.3 percent of GDP next year.