Argentines protest for wage increases amidst growing default fears

Large crowds took to the streets of Buenos Aires on Friday to call for an increase in wages, as the Argentine peso buckles under the weight of inflation and default fears.

Argentina’s peso slumped on Friday, recording its worst monthly performance ever, after ratings agency Standard & Poor’s announced it was slashing Argentina’s long-term credit rating to “junk.”

The ratings action follows the government’s announcement to “re-profile” some $100 billion in debt earlier in the week, sinking Argentine bonds and igniting worries of a full-blown debt crisis for Latin America’s third-largest economy.

Wider economic woes have hit the purchasing power of the consumers, with trade union movements demanding greater pay. Union officials met with members of the government to push the issue of increasing wages.

The carnage in Argentine markets started after business-friendly President Mauricio Macri suffered a thumping defeat in primaries at the hands of Alberto Fernandez, stoking fears that the return of a leftist government could herald a new era of interventionist policies.

The general election, with Fernandez now the clear front-runner, is in late October. But the incumbent has vowed to keep up his message of economic responsibility whilst looking out for citizens.

After the meeting with trade union officials, the Macri government announced that there is to be a staggered increase in the minimum wage.

(Source: Reuters)