Argentina's Milei Devalues Peso by 54% in First Batch of Shock Measures

[muriel_volestrangler]

Source: Yahoo/Bloomberg

Argentina devalued the peso by 54%, overhauled its crawling peg and announced massive spending cuts to eliminate its primary fiscal deficit next year as the first steps in President Javier Milei’s shock-therapy program.

The newly inaugurated administration weakened the official exchange rate to 800 pesos per dollar, Economy Minister Luis Caputo said in a televised address after the close of local markets on Tuesday. It was 366.5 per dollar before the address. The central bank will henceforth target a monthly devaluation of 2%.
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The government will slash spending equivalent to 2.9% of gross domestic product, in a radical fiscal adjustment, according to a senior economic official.
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Other measures announced including halving the number of ministries, cutting transfers to provinces and suspending public works. At the same time, Argentina will boost certain social welfare programs, Caputo said.

Read more: https://finance.yahoo.com/news/argentina-milei-devalues-peso-54-224352309.html

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That's certainly "shock therapy". The IMF loves it; the effect on the people will probably indeed be shocking.