By Luc Cohen and Rodrigo Campos
BUENOS AIRES/NEW YORK Aug 31 (Reuters) - Investors werelooking on Friday for hints of a fiscal package the Argentinegovernment said it would announce next week after dramatic dropsin the peso currency, while the opposition called for protestsas discontent with President Mauricio Macri grows.
The peso lost 20 percent of its value against theU.S. dollar in the two days since Macri announced he had askedthe International Monetary Fund to advance disbursements under a$50 billion financing deal, which raised alarms in markets aboutwhether Argentina could fund its 2019 deficit. Speaking to reporters on Thursday night, Treasury MinisterNicolas Dujovne said the government would announce a set of neweconomic measures on Monday, and would target a 2019 primaryfiscal deficit below the 1.3 percent of gross domestic productagreed with the IMF. The government needs to do whatever it takes to bring fiscalaccounts back in order, said Bertrand Delgado, emerging marketsstrategist at Societe Generale in New York. "That's the way tobring back confidence to the markets," he said.
Macri's administration is expected to send its proposed 2019budget to Congress next month. Austerity measures have beenunpopular with many Argentines, who blame budget cuts imposed bythe IMF for exacerbating the effects of a 2001-02 economiccrisis that plunged millions into poverty.
Tens of thousands of people marched through downtown BuenosAires on Thursday evening demanding higher budgets for publicuniversities and higher salaries for university professors andstaff. Protesters say salaries have been eroded by inflationthat clocked in at an annual rate of 31.2 percent in July.
"In the context of the debate over the IMF's adjustmentbudget, we need to organize to change the economic path," saidVinesa Siley, a lawmaker in Argentina's lower house of Congressaligned with former populist President Cristina Fernandez.
Members of Fernandez's Citizens' Unity party called forFriday evening protests against Macri's government across thecountry. Macri's poll numbers have tanked as the economy slidesinto recession, posing a risk to his re-election prospects innext year's presidential race where he could face Fernandez.
That risk is also contributing to the peso weakness, saidDirk Willer, Citigroup's global head of emerging marketstrategy. "It is a reflection that the election could go'wrong,'" Willer said. "Political uncertainty is being pulledforward in time."
(Reporting by Luc Cohen in Buenos Aires and Rodrigo Campos inNew YorkEditing by Leslie Adler)
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