President-elect Javier Milei has confirmed what many had already assumed: Luis ‘Toto’ Caputo will serve as economy minister in his new government.
Milei, who assumes office on December 10 with an unenviable to-do list, said in an interview with Radio Mitre on Wednesday morning that “the minister of economy is Luis Caputo” and that “we had already defined it.”
Justifying his decision, Milei said that he needed an official heading the portfolio that had “great expertise” due to the risk of a hyperinflationary spiral.
Argentina is facing a deep economic crisis, with the economy set to enter recession imminently. Consumer prices have increased by more than 140 percent over the last 12 months and poverty affects more than 40 percent of the population.
"I need someone who has an expert financial hand – there is no greater financial expert in Argentina than Luis Caputo,” said Milei.
Caputo, 58, has been working with the president-elect for weeks and travelled with him to the United States last Sunday for a short trip.
A former employee of Deutsche Bank and JP Morgan, Caputo served as finance minister and Central Bank governor during Mauricio Macri’s 2015-2019 government.
After two days of meetings in Washington and New York – which included a trip to the White House – Milei returned to Argentina on Tuesday, with the new economy minister and Milei’s future Cabinet chief, Nicolás Posse, staying behind.
While in the US Capitol, Milei and his team met with officials from US President Joe Biden’s government, including figures from the US Treasury, and technical staff from the International Monetary Fund, with whom Argentina has a US$44-billion credit programme.
The president-elect also held talks with US National Security Advisor Jake Sullivan and other officials from the US State Department.
In his radio interview, the president-elect confirmed that "the meetings with the Treasury and the Fund were led by Nicolás Posse and Luis Caputo." He described them both as “excellent.”
The right-wing libertarian said US Treasury officials “understand Argentina's problems to perfection" and that “strong progress” is being made.
"They are very well acquainted with what has to do with the Leliqs," detailing that "in this sense, the minister of economy, Luis Caputo, was able to discuss these issues in depth."
Milei said they had been given “an excellent reception and they understand perfectly the challenge of what we are facing."
Explaining why he had turned to Caputo, Milei said that "when one looks at the nature of Argentina's problems, when one notes that of the 15 points of fiscal deficits, Argentina generates 10 at the Central Bank, one sees that the first problem to solve is the Leliqs," referring to short-term notes issued by the Central Bank that are used to absorb pesos from the economy.
Caputo was finance minister from the very beginning of Macri's government, during which time he negotiated a US$16.5-billion deal with holdout bondholders, allowing Argentina to return to international capital markets. He later issued a 100-year bond that the government of Alberto Fernández swapped after defaulting again in 2020.
Amid a currency run in 2018, Macri tapped Caputo to take over at the Central Bank, but he only served for a few months before unexpectedly stepping down amid tensions with the International Monetary Fund.
Milei, a 53-year-old economist, said "it is fundamental to solve this problem with great expertise because otherwise we will end up in hyperinflation," praising Caputo's knowledge of the matter.
In a later interview with Radio Rivadavia, the La Libertad Avanza leader said Caputo would be “in charge of defusing the bomb that the government is leaving behind, so that we avoid what would be the worst crisis in Argentina's history.”
On the whole, the future president said his visit to the US had been " very positive” with “results that have really surprised us, and the tour is not over yet because Nicolás Posse and Luis Caputo are still working in Washington,”
He also pointed out that "we had to return to Buenos Aires and Posse and Caputo went to see the IMF. So I understand that at some point today I will have the feedback from them on what has been going on.”
Milei refused to confirm growing rumours that his unsuccessful rival for the Presidency, opposition leader Patricia Bullrich, would be his security minister.
"We are working on it, the definitions will be known on December 10," he told Radio Rivadavia.