Current:Home > BackArgentina announces a 50% devaluation of its currency as part of shock economic measures-InfoLens
Argentina announces a 50% devaluation of its currency as part of shock economic measures
View Date:2024-12-23 10:14:12
Argentina on Tuesday announced a sharp devaluation of its currency and cuts to energy and transportation subsidies as part of shock adjustments new President Javier Milei says are needed to deal with an economic "emergency."
Economy Minister Luis Caputo said in a televised message that the Argentine peso will be devalued by 50% from 400 pesos to the U.S. dollar, to 800 pesos to the dollar.
"For few months, we're going to be worse than before," he said.
It comes two days after the libertarian Milei was sworn in as president of the second largest economy in South America, and immediately warned of tough measures.
Milei said the country didn't have time to consider other alternatives.
Argentina is suffering 143% annual inflation, its currency has plunged, and four in 10 Argentines are impoverished. The nation has also a yawning fiscal deficit, a trade deficit of $43 billion, plus a daunting $45 billion debt to the International Monetary Fund, with $10.6 billion due to the multilateral and private creditors by April.
As part of the new measures, Caputo said the government is also canceling tenders of any public works projects and cutting some state jobs to reduce the size of the government. He also announced cuts to energy and transportation subsidies without providing details or saying by how much.
He said the measures are necessary to cut the fiscal deficit he says is the cause of the country economic problems, including surging inflation.
"If we continue as we are, we are inevitably heading towards hyperinflation," Caputo said. "Our mission is to avoid a catastrophe."
The IMF welcomed the measures, saying they provide "a good foundation" for further discussions with Argentina about its debt with the institution.
"These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthen the foreign exchange regime," said IMF spokesperson Julie Kozack in a statement. "Their decisive implementation will help stabilize the economy and set the basis for more sustainable and private-sector led growth."
- In:
- Economy
- Argentina
veryGood! (9621)
Related
- Jason Kelce Jokes He Got “Mixed Reviews” From Kylie Kelce Over NSFW Commentary
- Judge tells UCLA it must protect Jewish students' equal access on campus
- Coco Gauff loses an argument with the chair umpire and a match to Donna Vekic at the Paris Olympics
- Olympics 2024: A Deep Dive Into Why Lifeguards Are Needed at Swimming Pools
- NASCAR Cup Series Championship race 2024: Start time, TV, live stream, odds, lineup
- Three Facilities Contribute Half of Houston’s Chemical Air Pollution
- Norah O’Donnell leaving as anchor of CBS evening newscast after election
- Judge tells UCLA it must protect Jewish students' equal access on campus
- 'SNL' stars jokingly declare support for Trump, Dana Carvey plays Elon Musk
- Olympic gymnastics live updates: Simone Biles, USA win gold medal in team final
Ranking
- Chrysler recalls over 200k Jeep, Dodge vehicles over antilock-brake system: See affected models
- Haunting Secrets About The Blair Witch Project: Hungry Actors, Nauseous Audiences & Those Rocks
- Double victory for Olympic fencer competing while seven months pregnant
- USA men's 4x200 relay races to silver to cap night of 4 medals
- Why Amanda Seyfried Traded Living in Hollywood for Life on a Farm in Upstate New York
- Paris Olympics highlights: Simone Biles and Co. win gold; USA men's soccer advances
- Paychecks grew more slowly this spring, a sign inflation may keep cooling
- Olympics 2024: A Deep Dive Into Why Lifeguards Are Needed at Swimming Pools
Recommendation
-
Brittany Cartwright Defends Hooking Up With Jax Taylor's Friend Amid Their Divorce
-
Texas’ floating Rio Grande barrier can stay for now, court rules as larger legal battle persists
-
Hoda Kotb Uses a Stapler to Fix Wardrobe Malfunction While Hosting in Paris
-
Body of missing 6-year-old nonverbal, autistic boy surfaces in Maryland pond
-
Younghoo Koo takes blame for Falcons loss to Saints: 'This game is fully on me'
-
Report: U.S. Olympic swimmers David Johnston, Luke Whitlock test positive for COVID-19
-
Tesla recalls 1.85 million vehicles over hood latch issue that could increase risk of crash
-
2024 Olympics: Team USA Wins Gold at Women’s Gymnastics Final