Argentina’s President Javier Milei addresses supporters from the Casa Rosada balcony, as his sister Karina Milei and his partner Fatima Florez look on, after his swearing-in ceremony, in Buenos Aires, Argentina December 10, 2023. REUTERS/Agustin Marcarian/File Photo Acquire Licensing Rights
Published December 13, 2023
LONDON/BUENOS AIRES, Dec 13 (Reuters) – Argentina’s peso dropped more than 50% to 801 to the dollar on Wednesday as markets cautiously welcomed the first details of President Javier Milei’s plans to shock Argentina’s beleaguered economy back on track.
The libertarian president’s administration swept to office with promises of drastic economic changes to tackle negative reserves, inflation above 100% and years of economic stagnation.
The rapid devaluation follows a raft of changes unveiled late on Tuesday by Economy Minister Luis Caputo, including a more than 50% cut to the official peso rate, slashed energy subsidies and cancelled public works tenders.
“The news is positive,” said Argentina expert Bruno Gennari at KNG Securities. “It is a massive fiscal effort, with 3 ppts of GDP of spending cuts and 2.2% of additional revenues.”
International sovereign dollar bonds gained more than 2 cents to trade between 35.7-41.25 cents on the dollar, many at their highest level since 2021. U.S.-listed shares of Argentinian state oil company YPF rose around 1% in premarket trading.
“Non-deliverable” FX forwards moved sharply, showing bets that the peso’s value would continue to dive. One-year forwards hit a level of 1,687 .
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SOURCE: www.Reuters.com
RELATED: Argentina’s Milei starts shock therapy by devaluing peso by 50 percent
A supporter of Argentina’s President Javier Milei displays a $100 bill placard with an image of the leader [Luis Robayo/AFP]
Published December 13, 2023
New president Milei warns of painful measures as currency value slashed, subsidies cut, public works tenders cancelled.
Argentina’s government has announced it will slash the value of its currency, the peso, by more than 50 percent against the US dollar as its new far-right president seeks radical solutions to fix the country’s worst economic crisis in decades.
President Javier Milei‘s economy chief announced the painful measure on Tuesday, saying it was necessary for Argentina to “avoid catastrophe”.
The devaluation would drop the peso’s value from 400 to the dollar to more than 800 to the dollar, a blow to tens of millions of Argentinians already struggling to make ends meet.
Economy Minister Luis Caputo announced a raft of other austerity measures, including sweeping subsidy cuts, the cancellation of tenders for public works projects, and plans to axe nine government ministries.
However, the government plans to double social spending for the poorest to help them absorb the economic shock.
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SOURCE: www.aljazeera.com
RELATED: Javier Milei: New president tells Argentina ‘shock treatment’ looms
Published December 11, 2023
Argentina’s new far-right president has vowed to deliver economic “shock treatment” in his first speech after formally taking office.
Javier Milei warned Argentines “there is no money” and recommitted to a programme of harsh austerity measures.
The populist outsider won a surprise election victory in November with radical pledges to overhaul the South American nation’s ailing economy.
Mr Milei’s inauguration was held in Buenos Aires on Sunday.
In a day of pomp and ceremony, the 53-year-old capped his extraordinary rise to power with a speech which left Argentines in no doubt he intends to embark on an economic path unlike any previous president.
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SOURCE: www.bbc.com
