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Argentina devalues peso more than 50% to tackle economic crisis

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Agence France-Presse

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img alt="A person holds the five hundred Argentine peso bill as they shop in the City of Buenos Aires, Argentina, 12 August 2021. EPA-EFE/DEMIAN ALDAY ESTEVEZ" src="https://sa.kapamilya.com/absnews/abscbnnews/media/2023/overseas/12/13/argentine-peso-bill-epa-12132023.jpg"/><figcaption>A person holds the five hundred Argentine peso bill as they shop in the City of Buenos Aires, Argentina, 12 August 2021. EPA-EFE/DEMIAN ALDAY ESTEVEZ</figcaption></figure></div> BUENOS AIRES, Argentina - Argentina&#x27;s Economy Minister Luis Caputo announced Tuesday the devaluation of the peso by over 50 percent to the dollar, as the new government seeks to tackle the country&#x27;s deep economic woes.&quot;The official exchange rate will go to 800 pesos&quot; to the dollar, up from 391, Caputo announced, part of a raft of &quot;shock&quot; measures to tackle triple-digit-inflation and cut spending.He also announced a reduction in the state&#x27;s generous subsidies of fuel and transport, without saying by how much.He said politicians had long supported the subsidies to &quot;deceive people into believing that they are putting money in their pockets. But as all Argentines will have already realized, these subsidies are not free, but are paid with inflation.&quot;In a pre-recorded video message, Caputo took pains to explain to Argentines the cause of their decades of recurrent economic crises, debt, inflation and fiscal deficits.He compared the country&#x27;s chronic &quot;addiction&quot; to spending more than it earns to a household budget and said the country had posted a fiscal deficit for 113 of the past 123 years.Year-on-year inflation is currently at 140 percent, with new figures to be announced Wednesday.Caputo said the new government of President Javier Milei had inherited &quot;a fiscal deficit of more than five-and-a-half&quot; points of gross domestic product.&quot;If we continue as we are, we are inevitably heading towards hyperinflation.&quot;&quot;What we come to do is the opposite of what has always been done... to solve this problem at its roots, precisely so that we do not have to suffer these consequences anymore, so that we do not have to suffer more inflation, so that we do not have to suffer more poverty,&quot; said Caputo.Other spending cuts he announced include the suspension of all state advertising for a year -- which he said had cost 34 billion pesos in 2023.In addition &quot;The state will not tender any more new public works, and will cancel approved tenders whose development has not yet begun.&quot;The reality is that there is no money to pay for more public works that, as all Argentines know, often end up in the pockets of politicians or businessmen on duty.&quot;He said infrastructure projects would be carried out by the private sector in future.Another measure would be canceling the renewal of public jobs contracts that were less than a year old.Milei has already slashed nine government ministries, which Caputo said would cut 34 percent of all political jobs.<div>fb/nro</div><div>© Agence France-Presse</div>