Argentina’s currency plunged on Wednesday to a record low of 1,531.3 pesos, wiping out an annualised profit of $4.3 billion for the first time in four years.
The peso’s plunge is the latest sign that the world’s second-largest economy is in danger of entering a slump as investors continue to sell their assets.
It’s not clear when the peso could recover to the level of $1,500 before reverting to its previous level of 1.195, but the fall could be seen as a signal of further global weakness.
The country’s foreign exchange reserves fell by $8.5 billion in the 12 months to July, the biggest drop in five years.
The currency’s plunge comes despite the government’s insistence that the currency has recovered.
The government had warned that it would keep the currency at $1.4550 until the end of the year, and had set a target of hitting the mark in the coming months.
The drop comes as Argentina’s central bank cut its benchmark rate to a historic low of 6% on Thursday, which will make the pesos more expensive to buy in the global market.
Its peso was trading at 2,814.4 pesos ($2,719.4) at 7:35 a.m.