During his campaign, President Javier Milei famously brandished US hundred-dollar bills with his face on them, promising sweeping economic reforms. Yet, under his administration, Argentines find themselves needing pesos more than ever.
A significant shift has occurred in Argentina’s currency market: more people are now selling their dollar savings for pesos to cover daily expenses, reversing a long-standing trend. This unexpected demand for the peso stems from Milei’s “shock-therapy” economic policies implemented after he took office on December 10.
According to central bank data released on Friday, 208,000 Argentines sold foreign currency through official channels in April, while 51,000 bought dollars or other hard currencies. This marked the first reversal of this trend since at least 2018. In stark contrast, in November—just before Milei’s inauguration—789,000 Argentines were buying hard currency, compared to only 114,000 selling dollars. These figures only represent a portion of the actual market activity, as millions of Argentines also trade pesos and dollars on the extensive black market and through legal financial transactions.
The need for pesos is a direct result of Milei’s decision to lift price controls while maintaining a firm stance on the peso. His administration abandoned thousands of government-mandated controls that had previously suppressed prices. Since his inauguration, prices have surged by over 100%, while the peso has depreciated by only 59%. This disparity has made daily essentials significantly more expensive in dollar terms, reducing local incomes and compelling Argentines to convert their dollar savings to cover monthly expenses.
Milei and his economic team have consistently denied that the peso is overvalued and have no plans to accelerate its devaluation to align with inflation. Instead, they advocate for businesses to lower prices.
Despite the turmoil, Milei remains committed to his vision of a “competition of currencies” where both the US dollar and the peso coexist as legal tender. He also reiterates his pledge to eventually shut down the central bank entirely.
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