A little over a year ago he paraded in the middle of the presidential campaign, with a huge $100 bill – a representation of him – brandished over his head. The ultraliberal Javier Milei came to power in December 2023 with the promise of dollarizing the economy, a measure “super easy”assured, consisting of completely replacing the weight, then compared with“excrement”for the dollar. It was about overcoming inflation (193% in October in one year), an endemic problem in Argentina, wiping the slate clean with the past and with its weight, guilty of fueling distrust and incapable of maintaining a stable value. A spiral that fuels the increase in prices.
A year later, the dollar has not replaced the peso. Milei preferred forced dollarization – and its corollary promise, ” destruction “ of the central bank: a series of measures to deregulate the economy. Among these, one “megadecree” announced in December 2023 (more than 300 measures), then a comprehensive project approved in June (more than 200 articles), which includes, among other things, the end of rent control, the relaxation of the investment regime or even the possibility to privatize several companies. .
It’s not just a matter of priorities. If Milei has not replaced the peso as quickly as he wanted, it is because there is a shortage of dollars. At the end of 2023, the central bank’s net reserves were in the red (around -11.5 billion dollars, or 10.9 billion euros, according to private companies). Since then, his level has improved. But it is still negative, around -5 billion dollars, according to an estimate by the private company Abeceb.
Milei thus dilutes its emblematic proposal. Now it aims to promote a form of spontaneous dollarization, carried out daily by the Argentines themselves. “With the advance of endogenous dollarization, there will come a time when operations in dollars will be very large, and in pesos, very small, and when we reach this situation we will be in a position to close the central bank, and the politicians. will never be able to defraud you with inflationary taxes again »Milei explained to an audience of businessmen on October 18, during the annual conference of Argentina’s business elite, IDEA, in Mar del Plata (about 420 kilometers south of Buenos Aires).
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