Argentina has a new president, its fifth in two weeks. The country's Congress yesterday voted overwhelmingly to appoint a Peronist former vice president, Eduardo Duhalde, as president for the next two years.
In his acceptance speech, Mr Duhalde promised to form a government of national unity and to tackle the economic crisis that has led to violent protest action.
But he also made it clear that he would uphold a decision to suspend payments on Argentina's $132bn foreign debt.
Duhalde's advisers have also signalled that he could abandon or radically change the country's one-to-one currency peg to the dollar.
Sources said the new government could change the peg to 1.30 pesos or 1.40 pesos to the dollar. The devalued peso would then be pegged to a new basket of currencies, including the Brazilian real, euro, dollar and the Japanese yen.
While the peg, known as 'convertibility', helped bring Latin America's third largest economy monetary stability and high growth in the 1990s, it has been blamed for making Argentina one of the most expensive countries in the world to do business, aggravating an economic downturn.
Economists say a devaluation in the peso could bankrupt the country. Most Argentines earn in pesos but hold debts, such as mortgages and cars, in dollars. A sharp devaluation could lead to hyperinflation, a problem that haunted Argentina in the 1980s.
Duhalde said in an inauguration speech that he would announce a new economic programme on Friday.
