Argentina sticks to dollarization plan

Argentine Economy Minister Luis Caputo said there was no change in plans to switch to the dollar in the first round of shock therapy. Argentine President Javier Milei plans to switch to the dollar after the peso was sharply devalued as part of the first round of shock therapy aimed at helping the economy recover, according to Argentine Economy Minister Luis Caputo. “The goal is the same: to achieve dollarization,” Caputo said on television on Thursday, without giving details on the timing of the switch. “President Milei has always campaigned on dollarization and closing the central bank. These campaign promises have not been set aside,” Caputo said. Echoing comments from Argentine central bank officials earlier in the day, the economy minister said this week’s aggressive currency devaluation was aimed at starting to re-anchor inflation expectations. Inflation exceeds 160% Annual consumer price increases exceeded 160% even before Milei’s initial measures, which included aggressive spending cuts, amid expectations that economic hardship will become more severe in the near term. Monthly inflation reached nearly 13 percent in November, according to data released by the national statistics agency on Wednesday. Caputo said the new government had opted for “overshooting” rather than gradual devaluation to bring official interest rates closer to those seen in parallel markets, adding that the goal was to contain “this pent-up inflation” and expectations and prevent monthly price increases from exceeding 20 percent.