Fed remains calm and Argentina is facing bankruptcy?

Published on: 30-Jul-2020
Category: Trading
Last updated: 30-Jul-2020

Fed remains calm and Argentina is facing bankruptcy?

The stock exchanges on Wall Street were mostly friendly on yesterday's trading day, but the real economic development of the country looks different. The US Federal Reserve has announced its monetary policy decisions and warns of another negative record for the growth of the US economy. The Fed's base rate will remain at zero percent until the economy recovers from the current crisis. Fed chief Jerome Powell sees the containment of the corona pandemic as an indicator of a possible interest rate hike that so far seems far away. The extent of the slump in the US economy will be announced this afternoon. The Fed warns of a historic negative result that the country had to experience in the second quarter.

The US central bank also influenced the euro and dollar exchange rate. The euro has reached its highest level since 2018 in the past few days and recently stood at $ 1.1746. The European Central Bank then set the reference rate at $ 1.1725. At its latest high, the euro reached $ 1.1806. However, since the Fed is not easing its monetary policy, the dollar has strengthened again.

While economic growth is about to collapse in the USA, a new state bankruptcy threatens in Argentina. The country is hoping for help from the International Monetary Fund (IMF) to secure itself regardless of negotiations with its creditors. The Argentine government declined to offer creditors an offer of 65 billion euros. If there were to be a state bankruptcy, it would be the ninth in the country. The inflation rate in Argentina is currently 50 percent. According to experts, the country's gross domestic product is expected to decline by twelve percent. Now is the time to find a way out of a mountain of debt of $ 323 billion.



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