MercoPress. South Atlantic News Agency

Argentine President warns of hard times ahead

Milei announced a new intervention in the currency exchange market to bring down the “blue” dollar by making pesos even scarcer

Argentine President Javier Milei downplayed this weekend from Sun Valley, Idaho, the importance of the “blue” (a euphemism for “black market”) dollar going up in his country. However, he warned of “difficult” weeks to come as his Government starts a new zero-money-issuing phase, which he dubbed “a new upgrade of the monetary policy.”

”If I were to take the dollar that (former Economy Minister) Silvina Batakis had before (Sergio) Massa took office, and bring it to today, it gives AR$ 3,000. So, first of all, no panic, zero panic,“ said Milei, who also argued that ”there is an anomaly because the dollar is rising and we are buying dollars.“

Milei insisted his administration's first goal was zero deficit and spoke of a financial surplus came June's end. ”We are accumulating so much cash that, in the Central Bank's current account, we have AR$ 17 trillion,“ Milei went on. ”We have secured the July interest payments, we are very comfortable financially. The next stage is zero issuing.”

The Libertarian administration announced it would play in the MULC (Single and Free Exchange Market) to buy dollars and inject pesos to then “sterilize those pesos” by releasing dollars back into the market as of Monday. The mechanism is expected to “accelerate the disinflation process,” Milei also explained. “Both the remainder of this month and August are going to be difficult months in the exchange market because this is when the winter is at its harshest and more dollars are going to be lost for energy. We will totally restrict the amount of pesos.”

“In 6 months we will put an end to the fiscal deficit, the quasi-fiscal deficit, and the monetary issue. Consequence: we are going to exterminate inflation forever in Argentina,” Economy Minister Luis Toto Caputo posted on X. He is in Idaho together with Milei.

“We stop issuing pesos for each dollar of external sector liquidity. With this, the monetary policy that has been carried out is deepened. This is one of the most relevant news of recent times. Inflation R.I.P.” wrote Presidential Spokesman Manuel Adorni.