Argentina to devalue currency to stabilize the economy The new government of Argentina announced on Tuesday that the official exchange rate will go from 400 to 800 pesos per dollar, one of the measures in the «emergency» package to stabiliz
Argentina to devalue currency to stabilize the economy
The new government of Argentina announced on Tuesday that the official exchange rate will go from 400 to 800 pesos per dollar, one of the measures in the «emergency» package to stabilize the economy.
«We are going to adjust the official exchange rate. It will be set at 800 pesos so that the productive sectors have the right incentives to increase their production,» announced Luis Caputo, Minister of Economy in Javier Milei’s new government, in a recorded message.
Caputo indicated that this exchange rate correction will «be accompanied by a temporary increase» in the so-called Country tax applied to imports and non-agricultural export duties.
«In this way, we benefit exporters with a better price and equalize the tax burden for all sectors, ceasing to discriminate against the agricultural sector,» he said.
Caputo indicated that, «once the emergency is over,» they will «move towards the elimination of all export duties, which are a wicked burden that clearly we do not like and that hinders Argentine development.»
Reduction of subsidies
«We are going to reduce subsidies for energy and transportation. Today the State artificially maintains very low prices in energy and transportation rates through subsidies,» the minister also stated.
Caputo affirmed that «policy has always» done this «because in that way it deceives people, making them believe that it puts money in their pockets.»
«But these subsidies are not free but are paid for with inflation,» asserted the new minister of Javier Milei’s government.
These announcements are part of a dozen measures that make up an «emergency» package whose purpose, according to Caputo, «is to neutralize the crisis and achieve stabilize the economic variables» of Argentina.
The package focuses on a strong reduction of State spending with a view to achieving fiscal balance and cutting off the root cause of monetary issuance, which causes high inflation in Argentina, according to the diagnosis of the new government.
