![]() It’s a step that other countries have taken, just none the size of Argentina - Latin America’s third-biggest economy after Brazil and Mexico.ĭollarization means Argentina would give up the peso and use the US dollar as its currency, effectively wresting control of monetary policy from the country’s central bank and handing it to the US Federal Reserve. Milei has pledged to remove currency controls and import restrictions, which analysts say would result in even more pressure on the peso, taking the value of the currency closer to the levels at which it trades on various informal markets.īruno Gennari, Argentina expert at fixed income broker dealer KNG Securities, said the peso was trading at $1,009 versus the dollar on crypto exchanges Monday, considerably weaker than the $869 and $975 rates seen on Friday.Ī former economist and TV pundit who ran for president on a promise to “break the status quo,” Milei made “dollarizing” Argentina a signature campaign promise, hailing it as a cure for the country’s hyperinflation problem. The value of the currency has plunged 875% to the dollar over the past five years. State-owned energy company YPF ( YPF) jumped 40%, and banks Banco Macro ( BMA) and Grupo Financiero Galicia ( GGAL) gained 20%.Īrgentina’s financial markets are closed for a local holiday, but the peso weakened slightly in partial trade to stand at around 353.58 to the US dollar. Milei must tackle inflation above 140%, a shortfall in foreign currency reserves and the prospect of another painful recession.Īrgentina’s dollar bonds rose Monday, while the New York-listed shares of several Argentine companies surged. “We have monumental problems ahead of us: inflation, economic stagnation, lack of genuine employment, insecurity, poverty and indigence.”įinancial markets broadly welcomed Milei’s victory, which is likely to usher in a sea change in economic policymaking. “Today we end the destructive model of the ever-present state, it only benefits a few while the majority of Argentina suffers,” he added, while also acknowledging the challenges facing him. “The model of decadence has come to an end, there’s no going back,” Milei declared. But the self-declared “anarcho-capitalist”- who wielded a chainsaw on the campaign trail to symbolize his plans to cut state spending - promised “drastic” reforms. In his victory speech Sunday, Milei provided few details of the economic policies he plans to adopt when he takes office on December 10. Milei’s La Libertad Avanza coalition won the election with nearly 56% of the vote, defeating the incumbent center-left Peronist party and its candidate, economy minister Sergio Massa. Will the Libertarian’s radical plans see the light of day? ![]() 2 economy and ditch its peso currency in favor of the US dollar. Javier Milei won Argentina’s presidential election Sunday on a ticket to overhaul South America’s No.
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