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| Argentina’s new president begins ‘shock therapy’ by devaluing peso | |
| (about 1 hour later) | |
| Javier Milei has promised radical measures to battle the country’s worst economic crisis in decades | Javier Milei has promised radical measures to battle the country’s worst economic crisis in decades |
| Argentina’s new government has announced a sharp devaluation of the peso, cuts to energy and transportation subsidies and a freeze in spending on some major state programs. | Argentina’s new government has announced a sharp devaluation of the peso, cuts to energy and transportation subsidies and a freeze in spending on some major state programs. |
| The measures, announced on Tuesday in a televised appearance by the new minister of the economy, come as part of the “economic shock therapy” promised by the newly elected President Javier Milei. | The measures, announced on Tuesday in a televised appearance by the new minister of the economy, come as part of the “economic shock therapy” promised by the newly elected President Javier Milei. |
| The devaluation changes the official dollar exchange rate to 800 pesos per dollar from 365 pesos. | The devaluation changes the official dollar exchange rate to 800 pesos per dollar from 365 pesos. |
| State support of the peso has been maintained by strict capital controls during the past half-decade, which created a wide gap between the official exchange rate of the dollar and parallel rates. | State support of the peso has been maintained by strict capital controls during the past half-decade, which created a wide gap between the official exchange rate of the dollar and parallel rates. |
| The new Economy Minister of Argentina Luis Caputo divulged in a televised message that the measures are aimed at tackling spiraling inflation and containing the worst economic crisis in decades. | The new Economy Minister of Argentina Luis Caputo divulged in a televised message that the measures are aimed at tackling spiraling inflation and containing the worst economic crisis in decades. |
| According to Caputo, the plan will be painful in the short term but is vital for cutting the fiscal deficit and bringing down the triple-digit inflation the country is currently struggling with. | According to Caputo, the plan will be painful in the short term but is vital for cutting the fiscal deficit and bringing down the triple-digit inflation the country is currently struggling with. |
| “The objective is simply to avoid catastrophe and get the economy back on track,” he stated. | “The objective is simply to avoid catastrophe and get the economy back on track,” he stated. |
| The South American nation is currently struggling with a rampant inflation of 150%, low cash reserves and high government debt, while some 40% of its population is forced to live in poverty. Argentina has a massive $44-billion debt to the International Monetary Fund. | The South American nation is currently struggling with a rampant inflation of 150%, low cash reserves and high government debt, while some 40% of its population is forced to live in poverty. Argentina has a massive $44-billion debt to the International Monetary Fund. |
| The IMF said in a statement that the measures were “bold,” adding that implementing them would “help stabilize the economy and set the basis for more sustainable and private-sector led growth” following “serious policy setbacks” in recent months. | The IMF said in a statement that the measures were “bold,” adding that implementing them would “help stabilize the economy and set the basis for more sustainable and private-sector led growth” following “serious policy setbacks” in recent months. |
| “I welcome the decisive measures,” IMF chief Kristalina Georgieva said, calling it “an important step toward restoring stability and rebuilding the country’s economic potential.” | “I welcome the decisive measures,” IMF chief Kristalina Georgieva said, calling it “an important step toward restoring stability and rebuilding the country’s economic potential.” |
| For more stories on economy & finance visit RT's business section | For more stories on economy & finance visit RT's business section |
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