Argentina’s new government will lay out its economic “shock” therapy plans on Tuesday afternoon in a bid to rein in triple-digit inflation and rebuild depleted foreign currency reserves, with markets and ordinary Argentines on tenterhooks about the impact.
Economy Minister Luis Caputo will announce the measures after markets close around 5 p.m. (2000 GMT), the spokesman for libertarian President Javier Milei, who took office on Sunday, told a news conference. They are expected to include sharp cuts to state spending, a reduction of the size of the public sector and a potential sharp devaluation of the local peso. The currency is currently kept artificially strong by strict capital controls.
The measures would be in “in-line” with Milei’s campaign pledges, where he often appeared with a chainsaw to represent his planned cuts, presidential spokesman Manuel Adorni said, adding it was needed to avoid “deeper catastrophe”. On Tuesday trading in the peso in the official market was expected to be very restricted, as it had been on Monday, with the central bank allowing trades only on a priority basis, a source from the bank told Reuters.
Source: Devdiscourse
