June 15, 2018 / 12:03 AM / a year ago

UPDATE 1-Argentina's finance minister named head of central bank

(Adds quote from Sturzenegger, context)

BUENOS AIRES, June 14 (Reuters) - The government of Argentina President Mauricio Macri unexpectedly announced on Thursday it appointed Finance Minister Luis Caputo as president of the central bank.

As part of the shake-up, the finance ministry will be combined with the treasury ministry, Macri’s government said in a statement.

In his resignation letter, outgoing central bank President Federico Sturzenegger appeared to take some of the blame for ongoing currency volatility that recently led Argentina to seek a $50 billion lifeline from the International Monetary Fund.

“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,” Sturzenegger said in the letter to Macri that Sturzenegger shared on Twitter.

Under Sturzenegger, who was appointed by Macri at the start of his government in late 2015, the central bank was criticized for lowering interest rates in early January despite high inflation.

Earlier on Thursday, Argentina outlined plans to reduce the fiscal deficit and make the central bank independent in a letter of intent to the IMF that was signed by Sturzenegger and Treasury Minister Nicolas Dujovne.

Argentina’s peso weakened more than 6 percent on Thursday. (Reporting by Nicolas Misculin; Writing by Mitra Taj; Editing by Cynthia Osterman)

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