Javier Mli | Argentina: Luis Caputo announces official dollar will remain at 800 pesos, devaluation by 50% | shock | the world

A radical liberal government Javier Miley The currency devalued by more than 50% on Tuesday, Economy Minister Luis Caputo announced, establishing an official exchange rate of 800 pesos to the dollar, compared with 391 at Thursday’s end. Argentina High inflation is at risk.

“The origin of our problems is always financial” He urged the country to address its “addiction” to public deficits by announcing cuts to energy and transport subsidies, among other austerity measures, after taking office. mercy On Sunday.

Meera: Live | Luis Caputo announces the economic activities of the Millay government in Argentina

“If we continue as we are, we are inevitably heading towards a Hyperinflation”, he warned.

Argentina is in the grip of a severe economic crisis. Annual inflation of over 140% and a poverty rate exceeding 40% of the population.

“The official exchange rate will be worth 800 pesos so that the manufacturing sectors actually have the appropriate incentives.” Production should be increased,” he said. Kabuto In a previously recorded speech.

The government currently maintains a system of Currency control It has been in effect since 2019, with over a dozen different exchange rates.

Bar: Argentina: Millay government announces cuts to energy and transport subsidies

mercyThe 53-year-old economist symbolized his opinion by brandishing a chainsaw during the campaign. Reduced public expenditure, was sworn in on Sunday and promised that the country needed “shock” therapy to overcome the crisis, and ruled out anything “gradual”. The President proposes a fiscal adjustment equal to 5% of GDP.

“Today through these subsidies the government is artificially maintaining very low prices in energy and transportation rates.”The Minister referred to the amount spent by the public exchequer to maintain reduced prices for various consumer goods.

“But these grants are not free, but they are paid with inflation. What they give you in the price of the ticket, they charge you with the increase of the supermarket. With inflation, the poor are financing the rich,” Caputo said.

Austerity measures include cutting the size of the state and halting publicly funded infrastructure work initiatives that have not yet begun. From now on, public works will be privately funded, Caputo explained.

Activities listed by Caputo are:

• State labor contracts are not renewed They are less than a year old.
• Stop advertising for one year. (Caputo said 34 billion pesos were spent on advertising in one year).
• Ministries have been reduced from 18 to 9 and Secretaries of State, 106 to 54.
• Reduce preferred transfers From the Nation State to the Provinces.”
• New public works are no longer tendered by the national government It will also cancel approved tenders “where its development has not yet commenced”.
• Reduce subsidies For energy and transportation.
• Maintain projects and improve work As established in the 2023 budget but with modifications. He promised that social programs would be done “directly by those in need without middlemen like AUH and Alimentary Card”.
• Confirm the official exchange rate.