Argentina's government appointed Finance Minister Luis Caputo as the new president of Banco Central de la República Argentina, subject to approval by the Senate.
Caputo replaces Federico Sturzenegger, who resigned June 14.
"In recent months, various factors have deteriorated my credibility as president of the central bank, a key attribute needed to carry forward the coordination of such important expectations in the work assigned to me," Reuters quoted Sturzenegger as saying in his resignation letter.
In connection with the appointment, the government also announced a shake-up in which it will combine its finance ministry with the treasury ministry, Reuters reported. As of 2 p.m. ET on June 14, the Argentine peso fell 6.28% following a report that three central bank directors would leave.
Additionally, the government detailed to the International Monetary Fund its strategy to lower its fiscal deficit, submit a new central bank charter by March 2019 for Congress to approve and ultimately make the bank autonomous in December that year.
Moreover, Argentina is open to additional steps to ensure meeting targets set as part of its $50 billion financing arrangement with the IMF, such as removing subsidies for gas and transportation, canceling unnecessary public projects, and delaying tax cuts.
IMF Managing Director Christine Lagarde had described the Argentine government's economic plan, one that sets both "ambitious medium-term fiscal goals" and "establishes realistic inflation targets."