The President of Argentina announced the devaluation of the peso by half and a reduction in government spending
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The government of Argentina’s newly elected President Javier Miley has announced the first economic measures to help the country emerge from a protracted crisis, reports The Wall Street Journal. Economy Minister Luis Caputo said that the official peso exchange rate will be devalued by approximately half – from the current 366 per dollar to 800. Thus, the official exchange rate in the country will become closer to the market rate, at which about 1,070 pesos are given for $1.
In addition, the authorities intend to reduce the size and number of ministries in order to reduce the cost of running the government. Instead of the current 18, there will be 9. The Miley government will reduce energy and transport subsidies, and will also freeze the implementation of all budget-funded infrastructure projects that have not yet begun work.
According to Mr. Caputo, the measures taken by the government will hurt the population of Argentina in the short term, but the country has no other way out of the crisis.
“The goal is simple: to avoid disaster and get the economy back on track,” the minister said. “We are here to address the root of the problems. And for this we need to get rid of dependence on the budget deficit.” Mr. Caputo noted that over the past 123 years, Argentina has ended the year with a budget deficit 113 times. “There is no more money. We cannot continue to spend more than we earn,” the minister concluded.
Read about Javier Miley’s plans in the material “The President of Argentina is a Madman”.
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