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ECONOMY | 12-12-2023 09:53

Argentina to roll out first crisis measures in evening broadcast

Economy Minister Luis Caputo will deliver a recorded speech at 5pm Tuesday, in which he will outline emergency measures from President Javier Milei’s new government.

Argentine Economy Minister Luis Caputo will deliver a recorded speech Tuesday evening to outline emergency measures from President Javier Milei’s new government meant to halt the nation’s slide deeper into crisis.

The announcement will come after 5pm local time on Milei’s second full day in office, according to the government’s chief spokesman, Manuel Adorni. 

Milei outlined a sombre vision for rapid policy change in his Sunday inauguration address, though Caputo hasn’t detailed the extent of the measures yet. Adorni didn’t provide any other details about Caputo’s broadcast at his Tuesday morning press conference in Buenos Aires.

The government closed Argentina’s export registry Monday, a technical step that often foreshadows a currency devaluation or major policy change. The Central Bank also confirmed that there would be limited transactions in the country’s official exchange market until the government implemented its own policies. 

Currently, one dollar is worth about 365 pesos at the official rate. But lenders are already moving ahead of the government. Banco Santander Rio was processing retail transactions Tuesday at 500 pesos per dollar through its online banking site, while Banco BBVA Argentina was operating at 540 pesos, according to a person familiar with the matter. The so-called blue-chip swap rate, which mirrors what’s offered on the black market, was at about 1,030 pesos per dollar.

Local businesses are bracing for the worst with inflation already above 140 percent annually. Supermarkets and grocery stores are receiving price hikes north of 20 percent from suppliers in recent days, while gas stations have boosted prices by a similar amount. 

In his inauguration address, Milei said private estimates for monthly inflation from December to February range between 20 percent to 40 percent.

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by Manuela Tobias & Patrick Gillespie, Bloomberg

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