Argentina's Economic Overhaul Features 50% Devaluation of National Currency

By: Eliza Bennet

In efforts to combat the worsening economic conditions in Argentina, President Javier Milei has implemented a 50% currency devaluation, causing the Argentine peso's value to plunge from 400 to over 800 against the U.S. dollar. This decision is a part of a broader economic reform strategy.

This unexpected devaluation was made public on Dec. 12 as a drastic shift from the precedent means of tackling financial issues in the nation. The administration's plan includes additional austerity measures such as halting public works tenders, reducing significant subsidies, and consolidating government ministries, which has been described as 'painful steps to avoid disaster' by Economy Minister Luis Caputo.

The International Monetary Fund (IMF), which granted Argentina a $45 billion loan in 2022, has applauded these recent measures. It has also advised the government to control the use of cryptocurrencies. Despite the increasing adoption of Bitcoin and other digital assets as a hedge against the economic crisis, no official moves regarding Bitcoin have been mentioned in president's economic policy so far.

Milei, an advocate for austerity to direct Argentina towards economic stability, has faced mounting acceptance amongst locals despite his unconventional methods and approach.