Argentina economy minister quits

ARGENTINA'S economy minister Domingo Cavallo quit today and the entire Cabinet offered to resign amid mounting unrest in South America's third-largest economy.

After a day of riots and looting and President Fernando De la Rua's declaration of a State of Siege, Cavallo quit as protestors blocked streets in middle-class neighbourhoods of the capital Buenos Aires overnight. The embattled President is also facing calls from protestors to step down.

Cavallo, appointed in March, promised to turn around the country's stagnating economy, which is struggling to avoid default on $132bn (£91bn) of government debt, which makes it one of the largest emerging-market debtors in the world.

A series of austerity measures and cripplingly high interest rates have failed to prevent confidence in what was once South America's most advanced economy ebbing away.

The situation worsened dramatically this month after the International Monetary Fund withheld its latest funding tranche due to delays in passing the budget. Cavallo, who has vowed to maintain the one-for-one convertibility of the Argentinian peso with the US dollar, was forced to raid private pension funds to service the debt burden and impose limits on cash withdrawals at the nation's banks.