MercoPress. South Atlantic News Agency

Milei outlines his dollarization plan which will add other currencies

“At some point, there are going to be so many dollars in the economy that, maybe that day, we will be able to close the Central Bank,” Milei explained

During his appearance at the Expo Real Estate event, Argentine President Javier Milei explained Thursday his currency competition plan and also delved into the matter of closing down the Central Bank, one of his main campaign promises. The head of state also stressed that thanks to the economic adjustment undertaken by his administration a debt rollover for part of 2025 had been guaranteed.

Milei rebranded his campaign promise to “dollarize” Argentina's economy as a “currency competition.” The plan will allow the coexistence of the peso, the US dollar, and other currencies, thus responding to a common concern among economists about the effects of restricting monetary issuance in a scenario of economic growth.

“What we are going to do is to let currencies start competing. We are going to allow Argentines, since there will no longer be a currency barrier, to make their transactions in other currencies,” Milei explained.

As per his plan, every dollar entering the system may be used directly for transactions, eliminating the need to issue money to buy them. “I say dollars to simplify when I say currency competition,” he added, meaning that the same would apply to euros, pounds, or any other currency.

As economic activity grows, it will be the Argentines themselves who will monetize the economy by bringing in more dollars. “At some point, there are going to be so many dollars in the economy that maybe that day we will be able to close the Central Bank. And on that day, if I am still in the Government, I doubt not that I will close it,” he underlined.

Regarding the economic adjustment made by his administration, Milei explained that “it did not end up being of 5 points, but it was for the equivalent of 7 points of GDP.” He added that thanks to the spending cuts implemented, the Government will absorb “9 billion additional pesos” between now and the end of the year, which will allow Argentina to face part of next year's public debt.