Argentine economy minister Luis Caputo announced a set of measures to improve the economic situation in the country, including the devaluation of the Argentine peso by more than 50% against the dollar, and the new government’s quest to address the country’s deep economic problems.
Caputo said the “official exchange rate will reach 800 pesos” to the dollar, up from 391 pesos, as part of a package of “shocking” measures to tackle inflation that has reached 143%.
He also announced the reduction of state subsidies for fuel and transport, without mentioning its size, noting that “economic shock therapy aims to address its worst crisis in decades”.
In a long-awaited package of measures after liberal president Javier Mailly’s government took office on Sunday, Caputo said the plan would likely be painful in the short term but necessary to reduce the fiscal deficit and bring down inflation.
Argentina suffers from annual inflation of up to 143%, the collapse of the value of the currency, and four out of 10 Argentines suffer from poverty.
The country also has a large fiscal deficit, a trade deficit of 43 billion dollars, as well as enormous debts of 45 billion dollars to the IMF, of which 10.6 billion dollars are due to multilateral creditors and the private sector by April.
