Milei’s Remarkable 3-Month Track Record: The Peso Rally

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Bloomberg has a remarkable report about Argentina. Not only has the peso stopped plunging day to day, but in one key foreign exchange market (blue-chip swap), it’s rallying sharply. The peso has skyrocketed 25% against the dollar in only three months.

None of the other 148 currencies that Bloomberg tracks against the dollar gained as much.

What makes this so amazing is that Argentina was in a state of freefall until Javier Milei took over and reined in the bloated government spending, choked off demand for everything in the economy, including dollars, and tamed inflation that soared to an annual pace of almost 300%.

Bloomberg notes that “the cuts he imposed add up to the equivalent of almost 4% of the country’s economic output, an adjustment so aggressive that central bank officials estimate it’s larger than 90% of all those carried out in the world over the last several decades.”

He still has a lot of work ahead of him, and there’s pressure for him to scale back his agenda.

Milei doesn’t seem concerned about how this affects his longevity in the role.

According to Bloomberg, “What’s different now is that Argentines, for the moment at least, have more confidence in the peso, curbing demand for the safety of dollars. (This allowed the central bank to lower interest rates Thursday for the fourth time since Milei took office.) Moreover, with the budget cuts in place, the central bank is no longer directly financing government spending by printing money, bringing an end to a constant source of pressure on the currency.”


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