The peso in Argentina has been depreciated by over 50% by the country’s newly elected government.

Argentina has implemented a package of significant spending cuts in an effort to address the country’s severe economic crisis, which is considered the worst in decades. As part of this plan, the peso, Argentina’s currency, has been devalued by more than 50%. The new administration, led by Javier Milei, has also introduced measures such as cutting energy subsidies and canceling public works tenders. In a televised address, Economy Minister Luis Caputo announced a decrease in the official exchange rate from 366.5 pesos per dollar to 800 pesos per dollar, with a monthly devaluation target of 2%. Although these measures are expected to cause short-term pain, they are necessary to reduce the country’s fiscal deficit and combat high inflation rates. The International Monetary Fund (IMF) has welcomed these actions, which it believes will help restore stability and promote economic growth. Caputo emphasized the need to address Argentina’s deep fiscal deficit and break the country’s longstanding habit of relying on deficit spending. The country is currently grappling with soaring inflation, large-scale poverty, and negative central bank reserves. As part of the economic plan, Argentina also plans to reduce the number of government ministries and is in possession of a $44 billion loan from the IMF. These decisive measures have been praised by the IMF and are seen as a pivotal step in rebuilding the country’s economic potential. Banks had already anticipated a sharp devaluation in their exchange rates, with some setting their rates as high as 700 pesos per dollar. Caputo emphasized the need to address the root causes of Argentina’s economic problems and move away from merely treating the symptoms.

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