People walk past an exchange house Thursday in Buenos Aires as pensions and salaries in the country plummet.
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Tommy Samson is explaining why he's been forced to scale back business amid Argentina's financial-market rout. His Buenos Aires firm imports surgical equipment such as sutures for stitching wounds, paying in foreign currency. Then he sells them to local customers in pesos.The slump threatens to spread havoc through the $640 billion economy, rupturing supply chains for businesses and straining the finances of households.The central bank raised interest rates to 60 percent Thursday, the world's highest.The Fund said Friday that Argentina has its "full support". Argentina's $50 billion loan agreement in June was the biggest in IMF history.The government was forecasting that the economy would contract 1 percent in 2018, a sharp deterioration from the 3 percent growth that was predicted at the start of this year.Inflation has stuck above 30 percent and is set to accelerate on a weaker peso. Macri's pre-crisis plan was to chip away gradually at Argentina's budget deficit, lowering it from 6.5 percent of GDP last year to 3.8 percent in 2019 .
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