Jorge Otaola, Walter Bianchi

BUENOS AIRE (Reuters) – Argentina’s informal peso rate decreased 2.05% to 195 for each dollar on Friday. The country risk increased 19 basis points, to an all-time high of 1,672 due to rising inflation and increasing policy uncertainty ahead the November congressional elections.

Gustavo Ber, a local economist told Reuters that the dollarization process was occurring in a time when there is political uncertainty.

The week’s peso dropped 4.36%. It was its lowest level in almost a decade.

JP Morgan’s country risk spread was higher than its prior ceiling of 1,669 Basis Points, which it reached at the beginning of March.

The September consumer price index jumped to 3.5%, which was higher than expected. While the inflation rate for 12 months was 52.5% (inflation during the first 9 months of 2021 was 37%), it was 52% in September.

Argentina has struggled with runaway inflation since years. It is affecting savings, incomes, and economic growth. This week, the government frozen prices for over 1,000 household items until 2022. Globally, inflation is increasing.

Argentines are expected to vote in November for half the Senate and a third the lower house. The September primary election results saw a defeat of government-allied candidates, which prompted an outpouring of criticisms from the Peronist coalition.