Milei manages to transform Argentina’s currency into the market’s favorite

Javier Milei, the current president of Argentina, managed to accomplish what many considered unattainable for a nation plagued by uncontrolled inflation: he stabilized the country’s currency.

According to information from Exame magazine, data from Bloomberg indicate that the Argentine peso has appreciated 25% against the dollar in the last three months, a metric known as blue-chip swap, frequently used by investors and companies. This appreciation exceeds the gains of all other 148 currencies monitored by the agency in relation to the dollar. The feat is even more remarkable considering that the lowest exchange rate depreciation in Argentina in the last decade was 15%.

Since assuming the presidency in December, Milei has struggled to control public spending, in an attempt to contain inflation that has reached almost 300% per year. Milei, who proudly refers to his spending cuts as “the biggest in the history of humanity”, represent almost 4% of the country’s GDP. This aggressive adjustment is so significant that Central Bank authorities estimate it to be greater than 90% of all cuts made globally in recent decades, according to Bloomberg.

With the appreciation of the peso, the Argentine Central Bank has been able to acquire dollars daily on the market to replenish its international reserves. Currently, most monetary authorities around the world are making the opposite move to value their currencies in the face of the strengthening dollar.