Argentina’s peso slid on Tuesday as investors reacted with skepticism to President Mauricio Macri’s plans to cut the budget deficit, while a government delegation arrived in Washington for talks with the IMF about accelerating its standby finance deal.

On Monday, Macri abandoned his gradual approach to balancing the government’s budget, announcing new taxes on exports and steep spending cuts to eliminate Argentina’s primary fiscal deficit next year. In exchange, Macri is asking for early cash disbursements from the $50 billion standby deal he negotiated with the Fund earlier this year.

The new measures were meant to assure investors that Argentina can pay its debts but financial markets remained wary of the government’s ability to push reforms through a restive Congress amid growing frustration on the streets of Buenos Aires.

Argentina is struggling to break free from the cyclical financial crises that have bludgeoned the country every decade over the last 60 years. The most recent, in 2002, tossed millions of middle-class Argentines into poverty and shook investor confidence in the commodities-reliant economy.

The central bank auctioned $100 million in reserves on Tuesday to help prop up the peso, which fell 3 percent to 39.4 to the U.S. dollar on Tuesday. Last week alone the local currency lost 16 percent of its value.

“It’s hard for the market to believe that a country like Argentina can hit its new fiscal targets over the short term,” said Sebastian Cisa, with Buenos Aires-based brokerage SBS.

Argentina’s current IMF deal includes fiscal targets that Argentina says it wants to strengthen as part of its effort to gain the market’s trust. Those new fiscal goals are what’s being negotiated in Washington this week.

The local Merval stock index fell more than 4 percent with traders citing doubts about the government’s ability to make good on its new fiscal plans as Latin America’s third-largest economy slides back into recession this year.

IMF officials in Washington, who asked not to be identified, said they expected talks with the Argentine delegation to last “a few days.”

New terms would have to be approved by the IMF’s board of directors, which can be convened at any time. The Fund has generally voiced support for Macri and his orthodox economic policies.

Economy Minister Nicolas Dujovne has said early cash disbursements from the IMF would allow the government to avoid going to the bond market for financing over the near term. The IMF deal was negotiated earlier this year as pressure mounted on Argentina’s peso currency.

The current IMF deal calls for a primary fiscal deficit of 1.3 percent of gross domestic product next year. The new government proposal is to eliminate the deficit in 2019 while this year’s deficit target has been pared down to 2.6 percent of GDP from 2.7 percent.

“The new 2019 primary fiscal target is ambitious and will require unwavering discipline by the authorities, particularly given the backdrop of an aggravating recession and likely increase in poverty,” Goldman Sachs analyst Alberto Ramos said in a note to clients.

“Repairing damaged confidence among locals may take some time, particularly given the admittedly complex and volatile economic, political and social backdrop,” it said.

Faced with higher U.S. interest rates that siphoned off investors from emerging markets, contagion from a currency crisis in Turkey and a drought that wrecked harvesting of Argentina’s main cash crop, soy, the deficit left the country open to doubts about its ability to make next year’s debt payments.

The peso has lost about half its value against the dollar this year and Macri has struggled to get budget cuts approved.

When he tried cutting pension benefits late last year, protesters had to be driven back from Congress with tear gas and water cannon. “We had very ambitious goals, but the country was not ready for them,” Dujovne said told local television on Monday before leaving for Washington.
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