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Argentina's Macri raises taxes, axes ministries after peso plunge

President announces raft of 'emergency' austerity measures in a bid to tackle the country's worsening financial crisis.

The IMF loan has provoked outrage from Argentinians

Argentina's President Mauricio Macri has announced emergency measures to control the slide of the country's currency, including new taxes on exports and cutting government ministries by half.

The 59-year-old, who was elected in December 2015 on a pro-business platform, also said on Monday that his government would reinstate export taxes on agricultural products, backtracking on a major campaign promise.

The austerity move comes three days after Argentina's Central Bank raised interest rates to 60 percent - the world's highest.

Speaking in a televised address, Macri acknowledged that the country's economic crisis had become an "emergency" and that export taxes would be reintroduced to shore up the peso, which has lost more than half of its value against the dollar this year.

"To cover what's missing during this transition ... we'll ask those who have more capacity to contribute," he said.

"I'm referring to those who export in Argentina, that your contributions are greater.

"In regard to our governing team, I've made the decision to reduce the number of ministries to less than half ... I've decided to reduce my cabinet even more so we can give the upcoming agenda a more focused response."

Nicolas Saldias, a researcher at the Washington, DC-based Wilson Center focusing on Argentine politics and economics, described the announced measures as "necessary" and "the best of all the worst options".

"The country has run out of access to international credit markets because of the high interest rates they have to pay," he said.

Salidas noted that the highly controversial choice to bring back export taxes might have an adverse effect on the economy by lessening the willingness of businesses to sell abroad.

He added, however, that Macri has few other potential sources of revenue and welcomed the government's "commitment to not reduce social spending" by focusing on competitive sectors of the economy that "can afford to pay more taxes for a limited period of time".

IMF package

Argentina, the third-largest economy in Latin America, currently has an unemployment rate of about nine percent.

According to the World Bank, more than 28 percent of its some 43 million people live in poverty.

During his speech, Macri also pledged to increase food plans for struggling Argentinians.

READ MORE: IMF vows 'full support' for Argentina amid economic crisis

"These changes we're making to our team and with the advances we're making with the International Monetary Fund (IMF), we will begin to overcome the crisis, while always, always taking care of those who need it the most," he said.

In June, the IMF agreed to a three-year, $50bn relief package but on Monday Nicolas Dujovne, Argentina's treasury minister, travelled to Washington, DC to negotiate with the body for the funds to be released quicker.

However, many Argentinians are wary of the IMF after its perceived role in the country's worst ever financial crisis, during 2001-2002, which left one out of every five people unemployed and thrust millions into poverty.

The agreement sparked widespread protests across the country, with many blaming the IMF's free-market policies for contributing to the economy's collapse 17 years ago.

A May survey of more than 1,000 people by Argentine pollsters D'Alessio Irol/Berensztein found that 75 percent of respondents felt seeking assistance from the IMF was problematic.

READ MORE: Workers paralyse Argentina in third general strike

After losing another 15 percent of its value against the dollar last week, the peso managed a modest recovery on Friday morning following a move by the government to pump almost $700m into the currency market.

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