Introduction
Argentina’s newly appointed government is set to reveal its economic “shock” therapy plans in an attempt to combat triple-digit inflation and rebuild depleted foreign currency reserves. With both the markets and everyday Argentines awaiting the outcome, Economy Minister Luis Caputo is scheduled to announce the measures after market closure at 5 p.m. (2000 GMT) today. The libertarian President Javier Milei, who assumed office on Sunday, will present the plan in line with his campaign promises.
Expectations and Impact
According to Manuel Adorni, the presidential spokesman, the proposed measures are anticipated to align with Milei’s advocacy for austerity and fiscal discipline, often symbolized by his use of a chainsaw to represent planned budget cuts. Adorni stressed the urgency of these measures, emphasizing the need to avoid further economic catastrophe. As a result, trading in the official peso market is expected to be tightly restricted today, following similar restrictions on Monday. The central bank will permit trades on a priority basis only until the announcement is made.
Exchange Rate Projections
An insider at the central bank has disclosed that the exchange rate movement will remain unchanged until the economic measures are revealed. Analysts surveyed by Reuters anticipate a significant depreciation of the official exchange rate in the near term, with projections suggesting a decline to approximately 650 pesos per US dollar, compared to the current rate of around 365 pesos per US dollar.