Wednesday Aug 5, 2023 - Argentina - Fast-paced Inflation, Economy setbacks, Binance now in Argentina Argentina News Headlines

These are the trending news headlines in Argentina on Wednesday April 5, 2023
Argentina's monthly inflation is likely to have hit its fastest pace in at least seven months, with consumer prices forecast to have jumped 7% from the previous month, posing a challenge for Economy Minister Sergio Massa ahead of the October elections. The country's currency controls, multiple exchange rates, and price freezes on thousands of items are proving ineffective in controlling inflation, which could climb further above 100% annually, challenging Massa's political future. The country's dependence on agricultural exports and the impact of weather on the economy and politics mean that governments have a greater chance of success with fair weather, while drought years leave fragile financial and economic markets with recovery possible only after two harvests. The exit from the current crisis is likely to be slow, taking at least two years, and governments should consider insuring farmers against unpredictable weather to protect agricultural production and the broader economy.
Argentina's economy is facing a significant setback as droughts continue to impact the country's agriculture industry. Losses of $12 billion to $15 billion are predicted for the country's export earnings due to drought, and history shows that climatic phenomena like La Niña can have a considerable effect on Argentina's economy and sitting governments. Extended droughts with a lack of rainfall frequently have political consequences, especially in electoral years. In general, La Niña results in a circulation of the atmosphere with a negative impact on the distribution of humidity over Argentina. Combined with drought, heat waves in summer and frost in both early and late winter become lethal weapons against agricultural production. The rainfall of January and February has brought some relief in some zones, but it did not reach all the country or all the crops. The most recent calculations from the Rosario Stock Exchange forecast a plunge in hard currency earnings due to less exports. It is worth considering that the last 70 years have resulted in 26 years of El Niño, 24 years of drought from La Niña, and 20 neutral years with normal rainfall. The country's dependency on agriculture continues to have significant political and economic implications, especially during drought years.
Binance, the cryptocurrency exchange currently facing regulatory scrutiny in the U.S., is expanding its services in inflation-hit Argentina. Argentines can now buy and sell digital currencies directly with local pesos, allowing them to transfer pesos into a Binance account via a local partner. This move comes as cryptocurrencies become more attractive in Argentina due to annual inflation rates above 100%. While Argentina does not regulate crypto exchanges, the central bank has repeatedly warned about the risks of cryptocurrencies and markets regulator CNV is backing a bill to create a registry of providers offering virtual assets. Despite regulatory concerns, Argentina was among the top 15 countries in the world for crypto adoption last year, according to the Chainalysis index.
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