A man passes by the Central Bank of Argentina in Buenos Aires, Argentina, Aug. 4, 2020. The Argentine government confirmed on Tuesday that it has reached an agreement with its three main groups of private creditors and other minority bondholders to restructure a part of the country's foreign debt, valued at 66.2 billion U.S. dollars. (Photo by Martin Zabala/Xinhua)

Argentina's economy minister Martin Guzman, the architect of a recent major debt deal with the International Monetary Fund (IMF), resigned on Saturday as deep splits emerged in the ruling coalition over how to handle mounting economic crises.

Guzman, a minister since late 2019 and a close ally of President Alberto Fernandez, posted a letter on Twitter announcing his decision, adding he maintained "confidence in my vision of the path Argentina should follow."

The center-left Peronist president is facing his lowest approval rating since taking office in 2019, with cracks in his coalition, inflation running above 60 percent, the peso currency under growing pressure and sovereign bonds at record lows.

Guzman, a moderate, had clashed with powerful Vice President Cristina Fernandez de Kirchner, a militant two-term former president, who has criticized his handling of the economy and called for greater spending to alleviate high poverty levels.

The resignation leaves the ministry leaderless just as Guzman was expected to travel to Europe to negotiate a $2 billion debt deal with the Paris Club of sovereign lenders. 
It also deals a blow to Fernandez's weakening power base.

"It is the chronicle of a death foretold," said Mariel Fornoni, director of the Management and Fit consultancy, adding that a painful loss in midterm elections in 2021 for the government had hurt President Fernandez badly.

"Now he has lost another piece of his board, perhaps the most important, and is increasingly alone."

Investors, already jittery about the country's economic outlook, have pushed bonds down toward 20 cents on the dollar in recent weeks. All eyes now will be on Guzman's replacement.

Guzman, 39, said "there should be a political agreement within the governing coalition" to choose his successor.

The president's office said that it did not yet know when a replacement for Guzman would be announced. Fernandez had summoned members of his Cabinet and allies to an emergency meeting, one government source said.

"The president deeply regrets the decision but respects it. He is analyzing his next decisions," said another government source with knowledge of the matter.

Reuters