Argentina’s President Javier Milei announced a shocking statement on Tuesday, saying that the government will halve its currency valuation and cut its spending in an attempt to revive its slumping economy.
Economy Minister Luis Caputo said in a televised message that the Argentine peso will be devalued by 50% to 800 pesos against the U.S. dollar from the current level of 400 pesos.
The government aims to cut spending on public works as well as its subsidies on transport and energy sectors, and more.
President Milei admitted that the country will be worse than before and told his people to brace for tough measures. This came after Argentina’s central bank raised interest rates to a record high of 133% two months ago.
Argentina, the third largest economy in South America, faced an inflation crisis as high as 142% in October, while averaging a 40% inflation rate per year over the last decade. 4 out of 10 people in the country are in poverty with the government bearing a $45 billion debt to the International Monetary Fund, with $10.6 billion due to the multilateral and private creditors by April next year.
