UNION TO PROTEST BELT-TIGHTENING

If Macri was trying to calm investors, it did not work.

"The market is saying: 'Just the fact that you are engaging in this conversation makes me very, very nervous,'" Daniel Osorio, president of New York-based consultancy Andean Capital Advisors, said in a telephone interview.

The peso's decline has contributed to a jump in inflation, which hit a 12-month rate of 31.2 percent in July. In response, the central bank has hiked interest rates to 45 percent and sold more than $13 billion in reserves, including $300 million in an auction on Wednesday.

All that, combined with the budget cuts promised to the IMF that will slow down public works projects, is contributing to a recession that will result in an economic contraction of 1 percent this year, according to the government. That could hurt Macri's re-election prospects in next year's presidential race.

The June signing of the IMF deal reduced the need for costly bond market funding and briefly steadied the peso. The government has since announced more than $2 billion in budget savings, a process Macri promised to continue.

"We will accompany the IMF support with all necessary fiscal efforts," said Macri, who was elected in 2015 on a free market platform after eight years of deep government intervention in the economy under previous President Cristina Fernandez.

Argentina's biggest labor group, the CGT, said on Wednesday it will call a 24-hour general strike on Sept. 25 to protest Macri's belt-tightening measures. Two smaller union groupings said they will go on a 36-hour strike on Sept. 24 to protest the IMF, which many blame for the 2002 crisis.

"I know that these tumultuous situations generate anxiety among many of you," Macri said. "I understand this, and I want you to know I am making all decisions necessary to protect you."

Reuters