Argentina's New President Shocks The World With This BOLD Move To Tackle Economic Crisis

The President, who assumed office on Tuesday, 12th, believes these stringent measures are necessary to tackle the country's dire financial situation.

The Associated Press reported that Economy Minister Luis Caputo, in a televised message, announced a 50% devaluation of the Argentine peso, from 400 to 800 pesos to the U.S. dollar. "For a few months, we're going to be worse than before," Caputo warned, just two days after Milei, a libertarian, was sworn in as president of South America's second-largest economy.

President Milei has been vocal about the urgency of the situation, stating that the country didn't have the luxury of time to explore other economic alternatives. Argentina is currently grappling with a staggering 143% annual inflation rate, a severely devalued currency, and a poverty rate affecting four in ten Argentines. The country also faces a significant fiscal deficit, a trade deficit of $43 billion, and a daunting $45 billion debt to the International Monetary Fund, with $10.6 billion due to multilateral and private creditors by April.

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CNN reported that Milei's campaign centered on a pledge to replace the peso with the U.S. dollar to stabilize the economy. The peso's value has plummeted by approximately 52% this year against the U.S. dollar, largely due to strict capital controls that have artificially propped up the currency. The central bank's practice of printing more pesos to prevent the government from defaulting on its debt has resulted in soaring prices.

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December 14, 2023

These austere measures are the initial steps in a series of actions expected to combat the hyperinflation that prompted Argentina's central bank to hike its benchmark interest rate to 133%. Economy Minister Caputo reiterated Milei's campaign assertion that "there is no money," warning that the country would face a period of increased hardship, particularly with inflation.

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During his victory speech on Sunday, President Milei did not elaborate on the specifics of his economic plan. However, the unconventional leader, known for brandishing a chainsaw during his campaign to symbolize his intention to drastically cut state spending, has so far delivered on his promise of radical reforms.

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"I want you to be aware that we are going to begin the reconstruction of Argentina after more than a hundred years of decline, redrawing the ideas of freedom, although we are going to have to endure a period of hardness, we will move forward," Milei, an economist, told the crowd as he was sworn into office.